What is a two handle? What is the significance?
Sorry - trader lingo.
A “two handle” means that the first digit of the 10-year Treasury yield is a “2” - as in “2.990%” in yesterday’s market, or “2.95%” in the overnight market.
The significance: If we’re supposed to have inflation, then treasury yields should be going up. Indeed, that’s what the “smart” people on Wall Street and economists were projecting.
Here’s an example of what I speak:
http://online.wsj.com/article/SB10001424052748703523504574604351415337492.html
Here we are, halfway through the year, and we’re going firmly in the wrong direction to these forecasts.
Oh, and the other end of the yield curve? Golly, let’s have a look at those projections for 2+% yields on the 2’s, shall we?
http://online.wsj.com/article/BT-CO-20100629-712036.html
Huh. LOWER than the panic-buying of late 2008. Really? What does that tell us?
Well, it tells us that these clowns couldn’t forecast rain in Seattle, that’s what.