But of course it has to be more that just "jawboning..."
Bernanke has promised substantial interest rate hikes in coming months...probably for the rest of this year...
And stocks, bonds and commodities are reacting appropriately...they are plunging!
Bernanke is locked into the Greenspan 1/4 point hikes for the foreseeable future...likely the first "pause" will be in the 5.75 or 6.0 range. Amazingly, that's not too far off even at the current "baby steps" speed.
A 50 BP hike would turbo-charge the process...but that's not likely where Bernanke's thinking is at least for now...the process seems to be working.
Of course the real issue is what does the economy "look like" at 6% FED Funds...? With massive over-capacity and over-supply of goods...RETURN ON INVESTMENT BECOMES PROBLEMATIC.... And the tax cuts and port spending by the K-Street Kongress puts Bernanke in the position of bailing out the boat...but not being able to fix the "hole."
BONDS COULD BE A BUY SOON AT THE CURRENT RATE OF DECLINE...
