How Long Before The Fed Tries To Manipulate Long-Term Rates Lower?

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    How Long Before The Fed Tries To Manipulate Long-Term Rates Lower? Authored by Mike Shedlock via MishTalk, The Fed pledged to hold interest rates low for a very long time. What about the long end of the curve? Yields Reveal a Mini-Revolt On the Long End 3-Month Yield: 0.04% 1-Year Yield: 0.06% 2-Year Yield: 0.11% 3-Year Yield: 0.20% 5-Year Yield: 0.50% 10-Year Yield: 1.20% 30-year Yield: 2.01% US 30-year yield back to a 2-handle. Highest since Feb 19 (so a new post-pandemic high) Among the developed markets, only the mighty 30-year Aussie has a higher yield. pic.twitter.com/VPYcOKaA7H — Jim Bianco (@biancoresearch) February 12, 2021 Yield Curve Dramatically Steepens Notes In July of 2018 the spread between the spreads was only 12 basis points with the 2-30 spread at 38 basis points and the 2-10 spread at 26 basis points. The 2-30 spread at 1.83 is higher than any time since February 10, 2017. The 2-10 spread at 1.07 is higher than any time since April 7, 2017. Fed Losing Control of Long End On February 8, the Fed noted Monetary Policy Will Stay Accommodative For a Very Long Time. I commented “Like Forever”. On February 10, in a speech on the labor market Powell said the True Unemployment Rate is Actually 10% In Powell’s speech, he reiterated the message rates would stay low. But spreads have widened dramatically which begs the question:  How long before the Fed openly intervenes to push rates lower on the long end of the curve? Tyler Durden Mon, 02/15/2021 – 09:38

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