Monday, April 09, 2007
The Fed just added $1 billion in permenant funds when it bought bonds to hold indefinitely. This is in addition to the $10 billion overnight repurchase agreement for a short-term boost. Fed funds, however, continue to trade around 5.30% in an inverted yield curve. Ben can't seem to print enough dollars to normalize the curve.
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2 comments:
Hello Deb,
The G7 meeting over the weekend encouraged traders to continue with Yen carry trade, and was likely the reason behind Monday's (04-16) global stock markets rally.
Do you see this "carry trade funding of higher stock and commodity prices" as a intermediate to longer term negative for the market? To me it seems to put the market at risk of meltdown in the event of strengthening in the Yen.
Always appreciate your thoughts.
Regards, Jim P.
Dear Jim,
Thank you for another great question.
I agree with you and am less bullish than usual as a result.
All my best,
Deb
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