Quantitative Easing II that is. The WSJ details:
The Treasury market delivered a vote of confidence to the Federal Reserve Wednesday as the price of the 30-year bond plummeted, a signal the market believes the Fed's big bond buying will eventually spur inflation.
"The market appears to be pricing in the likelihood that [quantitative easing] will eventually succeed, and is positioning itself ahead of the inflation that may materialize in years ahead as a result of a successful reflation program," said Kevin Giddis, president of fixed income capital markets at Morgan Keegan + Co. in Memphis.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiS_plTqGFac-VNaCSrvsliBDjttoLuLdQN-EDxT8cpKTbVpje-i-JHRlWsR-vYf4jv6q-F_ZLO3ga6ibZn1FYTWoFpgR5gmUfbas6UoaCQMF0wMy0nnwnK5d09GRV_iR2OhEtu_NxKug/s800/longend.png)
Source: WSJ
I have to say that all of this is a "black swan" event for me. I never thought I would see the day where the Federal Reserve would be begging for inflation. I tended to pooh-pooh those who railed against a fiat money system. No longer.
ReplyDelete