“The interest rate on the
10-Year Note has risen from 1.58% on December 6th of last year, to as high as
2.03% by mid-February. Most equity market cheerleaders are crediting a
rebounding economy for the recent move up in rates. According to my count, this
is the 15th time since the Great Recession began that the economy was supposedly
on the threshold of a robust recovery.
However, the reading on last quarter’s GDP growth was
negative, and the January unemployment rate actually increased. Therefore, it
would be ridiculous to ascribe the fall in U.S. sovereign bond prices to an
economy that is showing signs of an imminent boom...."
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