Tags: Rising | rates | economy | bubble

As Rates Rise, Experts Ponder: Healthy Economy or a Bursting Bubble?

By    |   Sunday, 02 June 2013 12:18 PM

The surge in interest rates that pushed the 10-year Treasury yield to a 13-month high of 2.23 percent Wednesday has created bipolar views of the move – good versus bad.

Dan Greenhaus, chief global strategist at brokerage firm BTIG, summed up the divergent views succinctly for The Wall Street Journal.

One view: "the Treasury market is a beach ball being held under water, and the second the Fed lets go, [interest rates] are going to shoot up," Greenhaus said.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

The other view: "as long as you're seeing higher yields because of higher growth and inflation expectations, that's undeniably a positive," he said.

The 10-year yield stood at 2.135 percent late Friday, capping a rise of nearly one-half point during May.

Where rates go from here depends on the Federal Reserve, of course. But Fed officials
have been sending mixed messages about when it might start tapering its quantitative easing.

"The Fed has been clumsy because it is struggling to come to terms with the uncharted territory of these markets," Adrian Miller, a fixed-income strategist at GMP Securities, told The Journal. "And there is no unified opinion among its members as to the appropriate exit strategy."

Apparently we're in a period of great uncertainty.

“This [rising rates] is actually saying the economy is expanding,” Michael Franzese, senior vice president of fixed-income trading at ED&F Man Capital Markets, told Bloomberg.

"It puts the Fed in check. They are not sure what to do. Views are all over the place, legitimately.”

Editor’s Note: Put the World’s Top Financial Minds to Work for You

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Economy
The surge in interest rates that pushed the 10-year Treasury yield to a 13-month high of 2.23 percent Wednesday has created bipolar views of the move: good versus bad.
Rising,rates,economy,bubble
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2013-18-02
Sunday, 02 June 2013 12:18 PM
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