Oct 14, 2010
| Last Updated
- There is QE and there is QE. Nautical puns about “setting sail” and “finding safe harbor” or talking about colossal sums of money spent on buying U.S. government debt doesn’t come close to understanding what the U.S. Fed is trying to do—and if what we’re seeing in the Treasury market isn’t part of the plan, then the central bank has come dangerously close to losing control of its navigational instruments.
- As the charts (Figures 1 and 2) show, the Fed is using its most fearsome weapon—its reputation—to steer market-implied inflation expectations (the 10y breakeven,[...]
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