Curve Watchers Analysis is following the Operation Twist Story.
Operation Twist Early Results
Yields Rise at Short End, Sink on Long End
Yields are behaving as the Fed wanted. Note that the 30-year long bond is flirting with a sub-3% print. However, much of the move in long-term rates was front-run. Nearly everyone expected this move (even 70% of economists). I am wondering what the other economists were thinking.
The one-day results are a spectacular success visually as depicted in the above charts. Unfortunately, none of this can possibly do much of anything for the real economy, and the patient will die.
Mike “Mish” Shedlock
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