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Expect to hear the "R" word much more frequently
Bernanke has to be suffocating in that box he is in.
Interest rates are no longer accommodating for the real economy.
On the other hand the FF rate is not high enough to kill financial speculation.
Michael Shedlock 15/2 2007
The carry trade is attractive as long as money borrowed in Yen finds sufficient returns
elsewhere and/or the Yen itself continues to sink.
Michael Shedlock 15/2 2007
The greater the interest rate differential between the US and Japan the more attractive the carry trade is. Could it be a collapse in treasury yields in the US as opposed to a rise in interest rates in Japan that sinks the carry trade boat?
A series of economic reports came out on February 15th that can best be described as "dismal". Recession is now knocking on the door. In the weeks and months to come expect to hear the "R" word much more frequently.