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Freddie Fright + Free Fed Put
 The 10-Year Note went to a new high yesterday. Trouble at Freddie Mac popped the Treasury market on Monday, and price continued to move higher yesterday. Freddie is driving a "fright to quality," but the underlying reason folks are still snapping up Treasurys is the assurance by the Fed that interest rates aren't going anywhere but down... the so-called Greenspan Put is no longer so-called, it was made explicit on May 6th.
"...the probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its
already low level. The Committee believes that, taken together, the balance of risks to achieving its goals is weighted toward
weakness over the foreseeable future."
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© 2000 - 2003
Chairman MaoXian |
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