bac foreclosures
The Fed cut rates today … But can we really care?
By Don Miller
Collaborator written
Money facing the worst financial crisis since the Great Depression requires the central bank takes decisive action.
A gesture from the Fed could do is to buy large quantities of U.S. Treasuries in an effort to maintain yields the increase. Fed Chairman traders market seems to confirm this idea yesterday (Monday) to drive the price of Treasury bonds over 10 years for a third consecutive day. The yield curve, the difference in performance between years two and 10, crushed by the difference between the two decreased.
Driven by uncertainty about the recent attitude of the Bush rescue yields, investors have pushed Big Three "on Treasury bonds to record levels. obligations Safety Week yields obtained the lowest level seen since the U.S. began selling two, five, 10 – and values of 30 years.
In a report published last week, JPMorgan Chase & Co. (JPM) has predicted that the yield of treasury bills in 2009 stocks, corporate bonds and debt finance companies Fannie Mae (FNM) and Freddie Mac (FRE), United States.
"You Bloomberg News. "People are not buying Treasury bonds because they think the returns are attractive. Purchases are because they are afraid to put the money elsewhere. "
According to Merrill Lynch & Co. (MER), U.S. government bonds to prevent deflation. A sustained fall in asset prices is the worst fear of the central bank because it could lead to more foreclosures and economic chaos.
One of the side effects of the economic recovery plan is the potential for many inflation and a falling dollar. On the basis of their actions, the Japanese yen also lost ground against the pound sterling.
"We will stay in a low interest rate for some time ", vice-president of sales at Mizuho Corporate currencies Eliasson Bank Ltd. in New York, Bloomberg said Fabian. "Let him play away from interest rates and the dollar will suffer."
After four months of 24%, consensus estimates for the strengthening of the dollar issued from July to November, the U.S. dollar has declined 6.6% compared to a maximum of two Nov. 21 years, measured by the dollar index weighted by trade. The dollar fell against the euro, target = "_blank click on> "here
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