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Rate Hike Ahead, Bond Model Says Sell

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looks like June all you bondholders.......

 

 

 

http://www.forbes.com/sites/greatspeculations/2015/03/13/rate-hike-ahead-bond-model-says-sell/

 

Rate Hike Ahead, Bond Model Says Sell

 

 

3/13/2015 @ 4:17PM

 

“We’ve gotten used to thinking of a zero interest rate as normal-—it’s far from normal.”

-          Fed Vice Chairman Stanley Fischer

 

Employment figures continue to surpass analyst estimates and the trend over the last six months has been strong. Last Friday’s upside surprise sent interest rates higher. It is expected that the Fed moves off its zero bound peg by September.

 

“June has to be on the table,” adding that as the economy meets his expectations, “June would strike me as the leading candidate for liftoff” in moving short-term interest rates off their current near-zero levels… quoting Federal Reserve Bank of Richmond President Jeffrey Lacker.

 

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Sub 1 percent inflation and a rising dollar will keep rates from moving up anytime soon..the fed will gladly pay you Tuesday for a hamburger today.

 

Bubbles are fine as long as they pop on someone else's watch.

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I don't think Janet Yellen will raise interest rates until she sees some sign of inflation. Although employment has risen slightly, there is still too much softness in the economy.

 

FWIW, today Barclay bank offered me, unsolicited, 0% APR until 09/01/2016 at 3%, and 0% APR until 06/01/2016 at 1%. (I'm surprised that three additional months bumps the cost from 1% to 3%, but that was their offer.) The offer holds until 05/01/2015. I don't think they would do that unless their analysts saw no interest hike coming in the near future. I may take them up on it, as it is almost free money, especially at 1%.

 

Anyways, the public will be doing more reading of tea leaves over the next few days as the Fed meets.  

Edited by Circe

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