The Federal Reserve knows exactly where to take the rates, and the emerging are already asking Obama for a help: http://www.reuters.com/article/2013/09/04/us-g20-imf-idUSBRE9830AN20130904
Rates just keep ticking higher. http://finance.yahoo.com/echarts?s=...on;ohlcvalues=0;logscale=on;source=undefined;
I begin to think that the Fed will do the tapering in the U.S., but soon the QE will start in favor of the emerging debt.
An interesting article about who is buying the U.S. debt: http://www.zerohedge.com/news/2013-...ar-causes-china-russia-and-rest-world-turn-us
We haven't seen going on a buyer's strike in US Treasuries employed for political reasons yet, but it's not an implausible scenario. If it happens, then there could be a massive spike higher in LT interest rates.
How will the debt ceiling impact on TBond? For me it will be bullish (for gold too). http://money.cnn.com/2013/09/10/news/economy/debt-ceiling-bills-coming-due/index.html
I am already noticing this kind of movement, the emerging central banks are forced to sell dollars to defend the local currency.
But what happens to those treasuries once these emerging countries have already exhausted their reserves ? They are left with no reserves and nothing to sell, and an even less valuable currency.
Isnt the 2 year especially possibly overdone here. Fed will say easy money continues for short term rates. Maybe they are ALL over done as those "balanced risk" funds are getting monkey hammered (ZH term) and dumping. Are they done sellimg in this pre fed pause? Small, pin prick taper, may be fully and more than discounted. Also, large foreign buyers, Japan, China in their own own interest cant lock our exported trade deficit dollars in a vault. It continues to be in their best interest to support our fiscal irresponsibility to recirculate our dollars and support dollar debasement by bidding our treasuries and keeping interest rates low.. A stong dollar/higher rates/tightening is not in their interest in their currency manipulations. (Sounds like Rommey) Debt celing wll be raised of course and be a headwind for a rising dollar and rates on its own. Gold is recently saying taper and higher rates but not last week. Maybe everyone is already leaning too far too soon on higher rates trade. One thing i dont buy is the contributing compenent to higher rates of an improving economy. This is BS To me but stocks may climb forever.Why not? Just throwimg some well known possibilities out there and they are not important. Just take the enlightened full offer of the market