The Yield Curve

Here’s a colorful chart:

This is the point I’m trying to get across. I believe the Fed’s rate cut was NOT a cut to prop up equity prices, but a response to the turmoil in the bond market. If anything, it was to pop the bond bubble–and as you can see from the post below, the Fed’s job includes promoting “moderate long-term interest rates.”
I’m not saying I agree with it, but try to look at this from the Fed’s point of view. In just a few months, a flat yield curve completely unraveled.

Posted by Eddy Elfenbein on January 25th, 2008 at 10:46 am

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