U.S. Treasuries have made it through another range-bound night ahead of the release of the FOMC Statement for September. The market is all but certain that today's update will not feature a call for another rate hike, but it is widely expected that additional guidance will be provided regarding the Fed's plan to begin reducing the size of its balance sheet. After recovering off this year's low, the benchmark 10-yr yield hovers near levels that have been revisited on multiple occasions since the middle of April.
Yield Check:
2-yr: UNCH at 1.39%
5-yr: -1 bp to 1.82%
10-yr: -1 bp to 2.23%
30-yr: -1 bp to 2.80%
Where, oh where, is the moolah coming from to drive up those prices? The 1% and corps? Ya think. Guess what happens if Donald J. Quisling and friends gives such 1) a huge tax break and/or 2) a tax holiday to re-patriate overseas moolah? Yet more moolah chasing Treasuries. The Donald J. Quisling solution: push through legislation to change how Treasuries are sold. No longer at auction, with a fixed coupon, but with a fixed interest rate. That way right wingnuts can explicitly transfer wealth from the many to the few without all the hand-waving that goes on these days.
The sell-off from the Fed is a hand-waving method to drive up the interest rate: increase supply of instruments will drive price down and interest rate up to where it should be for the idle money rich. Amerika, such a great country. Just don't get sick.
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