First, a couple of personal views. Evidently, with very low rates, such as the ones the US govt was able to get for treasuries --which by all means was a true miracle. But, miracles go so far... so the Fed wisely realized the long bond would make no sense, --wouldn't sell in this low rate environment and decided to take it out of the market, which further helped the demand for treasuries (and lowering interest rates) . Nowadays, with short rates rising, since the demand for treasuries is weakening, China and most of the asian CB's are reducing their buying, it makes perfect sense for the Fed to try to quickly roll over its short term debt to long term bonds. In regards to the conundrum, the reappearance of the 30 yr bond has a double whammy effect: lowers the supply of short term treasuries while increasing the supply of long term bonds. This should help straighten out the yield curve. Rising rates should help the US dollar, but, this has a big problem, the US needs to reduce its wages in order to compete, and politically it's very hard to lower wages or increase layoffs, it's much preferable to devalue the currency, in this case --the US dollar. So, this is one more reason, of why I see interest rates with very little more room on the up. On the other hand, if people lose interest in the US dollar, all bets are off, we could potentially have an Argentinean debacle in the US, soaring interest rates, huge inflation, and all... But I don't see this as a likely scenario. So, keep an eye on the US trade account.