Quote:
Originally Posted by oilonly
Note: The fed said yesterday that they will be looking at buying Treasuries if long rates go up more than they want them to so watch out for when they do buy.
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That is true. The Fed will see that rates stay low so the housing market will start healing itself. Otherwise, home prices will continue their free fall which will further weaken the banks which will further weaken the economy. And the Fed can write a big check to be sure rates stay low.
When the economy starts to heal, and the Fed decides to stop keeping rates artificially low; a well timed short on the long bond would be profitable.