Tuesday, August 31, 2010

Why Market Risk May Be Higher Than You Think: Reason #2 of 5...

2. The Fed is nervous.

In August the Fed warned that the economy had weakened, and it unveiled its latest weapon in the war against deflation: using the proceeds from the sale of mortgages to buy Treasury bonds. That should drive down long-term interest rates. Great news for mortgage borrowers. But hardly something one wants to hear when the Dow Jones Industrial Average is already north of 10000.

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