mikew
09-27-07, 12:03 PM
i have read a few things now that the FED doesnt actually set the rates, it merely follows the bond markets
one chart here
http://bp1.blogger.com/_dtY0VOFMWMM/RvN2xYSTF9I/AAAAAAAAAbY/bTMq15pNR0A/s1600-h/ratesfft.gif
with the recent drop in rates and inflation fears in the future, foreigners (china) will be less likely to buy up the t-bills, leading to less demand and higher yields.. which should cause the FED to start raising rates, if they do indeed follow the bonds. however, cant the FED merely start buying up treasuries themselves? print money and bid the bonds up?
one chart here
http://bp1.blogger.com/_dtY0VOFMWMM/RvN2xYSTF9I/AAAAAAAAAbY/bTMq15pNR0A/s1600-h/ratesfft.gif
with the recent drop in rates and inflation fears in the future, foreigners (china) will be less likely to buy up the t-bills, leading to less demand and higher yields.. which should cause the FED to start raising rates, if they do indeed follow the bonds. however, cant the FED merely start buying up treasuries themselves? print money and bid the bonds up?