That is almost a 30 basis point drop in three days. No doubt the bad news in Japan about the inverted curve is lowering outlook. Our ten is 18 basis points above the two, just enough margin to get a bond trader out of bed.
Ned will start his algo tonight, borrow long deposit short. It is deflationary, it is soaking up debt capacity long term. More savings go to long term government debt. But if the ten year jump back to its normal 2.3% from this point, then it is a one third jump in interest charges on the budget. We now calculate interest charges on the extra trill or so Ned is creating. Our upper bond seems to be pressing us.
No comments:
Post a Comment