Surprisingly, it appears bidders were not worried too much about potential inflation, therefore did not demand higher yields. The yield on today's offering was 2.7%, slightly lower than a 2.72% which many had expected. Bid/cover ratio of 2.58 was very strong. This is good news as many view it widening the spread of the notes yield and the equity market yield, which makes the stocks more attractive.
Again, this is very surprising. We remain cautious because suddenly it appears that everyone (at least market players) is ignoring the realistic threat of inflation. All markets are displaying too much confidence in the Fed and the entire government, which is literally scary. We'll see what the Fed says later this afternoon. Given all of the political BS surrounding the entire market, we think the Fed will not say anything negative. But we hope that the Fed will be more realistic.
Again, this is very surprising. We remain cautious because suddenly it appears that everyone (at least market players) is ignoring the realistic threat of inflation. All markets are displaying too much confidence in the Fed and the entire government, which is literally scary. We'll see what the Fed says later this afternoon. Given all of the political BS surrounding the entire market, we think the Fed will not say anything negative. But we hope that the Fed will be more realistic.
No comments:
Post a Comment