Bernanke's Bind

The increase in long-end U.S. Treasury yields this year has been aggressive and accelerating -- and it might get worse. It began with the Jan. 3, 2013 release of the minutes of the Dec. 11-12, 2012 Federal Open Market Committee (FOMC) meeting. Several voting members expressed reservations about inflation potentially accelerating more rapidly than the Fed is comfortable with, or is good for the economy, by implementing the quantitative easing (QE) action calling for the purchase of $45 billion worth of long-end Treasuries each month.

The apparent dichotomy between voting for quantitative easing (QE), which was released three weeks earlier in the statement following the FOMC meeting, and the reservations about doing so (which was disclosed in the minutes three weeks later -- by those same members), shocked traders of all asset classes....584 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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