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To: Toddsterpatriot

The Fed stopping their buying and people thinking the Fed is done buying are two very different things. I would also consider the fact that every time the “Fed” stops buying, some ridiculous buyer pops up, e.g. Belgium, some Caribbean island, etc.


28 posted on 07/20/2015 4:04:35 AM PDT by palmer (Net "neutrality" = Obama turning the internet into FlixNet)
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To: palmer
The Fed stopping their buying and people thinking the Fed is done buying are two very different things.

A large group of people, apparently including you, missed the endless pre-taper announcements.

"We're gonna taper soon. Soon we're gonna buy fewer bonds"

Then they missed the progress of the taper.

"We reduced our purchases by $10 billion. Next month we'll reduce by another $10 billion"

The they missed the announcement last October.

"We're done. QE has ended. No more additions to the Fed balance sheet at this time"

These well informed, sophisticated investors, could, at any moment, discover the Fed stopped their buying 10 months ago and sell the Treasuries they don't own?

Maybe they'll call the brokers they don't have in order to sell the Treasury futures they never traded?

How, exactly, will their sudden realization cause rates to skyrocket?

29 posted on 07/20/2015 6:24:51 AM PDT by Toddsterpatriot ("Telling the government to lower trade barriers to zero...is government interference" central_va)
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