For the past three years, it has paid to bet on the pessimistic side of the outlook. For the past few months, I have privately fretted that this bet would soon wear thin. And it sure looks like it has. The flow of data in recent weeks has been, on net, very positive, offering a vision of a sustainable recovery.
Et dobbelt dip kan nu næsten udelukkes. Og de nye skattenedsættelser bør definitivt sikre sagen.
In this environment, it is not really much of a surprise that long term interest rates are headed higher. I tend to agree with those analysts echoed by Jim Hamilton and Brad DeLong - rising rates are a signal that the economy is strengthening. And strengthening enough that, despite the pessimistic tone of today's FOMC statement, it seems likely that the Fed will not feel compelled to extend large scale asset purchases beyond the existing plans. Without the Fed to serve as an excuse to keep buying Treasuries, traders are sending rates exactly where they should be going.
But won't rising rates slow the housing recovery, thereby putting the recovery in jeopardy? Seriously, what housing recovery is there left to protect? Should we really care at this point? Housing is SOOO 2005. The consumer is getting over it - the retail sales numbers tell that tale. Consumer spending is growing solidly in the absence of easy credit. ... Will the Fed shift course, even in a rosier environment? Doubtful, at least near term. They will likely see the current plan through to its fruition, while holding rates at rock bottom levels until it is quite evident that the output gap is closing, which will take a few years even if growth accelerates sustainably to 4%. Will more be forthcoming? Also doubtful, especially as the composition of the FOMC turns more hawkish. Moreover, enough risks remain to keep Fed officials from sleeping too soundly at night.
De lange renter er nu på vej op pga den forventede øgede vækst. Boligmarkedet synes at være opgivet. De korte renter vil følge efter når FED er 100% sikker på at bøtten er vendt hvilket kan tage en del år.
Nu bliver det interessant at se hvordan dette vil smitte af på europæiske renter.