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February 18, 2005

PPI and Greenspan, Friday, Feb 18, 2005 09:28:02

This week Alan Greenspan made a startling admission to Congress. He said he was baffled that long-term interest rates have continued to tumble, but he vowed to continue with a strategy of short-term rate hikes. That was a signal that today's PPI number would be a multi-year record high. Inflation is coming; the Fed has to tighten; the bond market is going to cave in. I'm usually not an alarmist, but seriously folks, this is not a good time to be holding long-term (10-year to 30-year) bonds. The rapidity these prices fall will stun you. Time to short the TLT.

Posted by Posted by Bill Cara on February 18, 2005 09:27:33 AM | Category: Bonds