I see a potential nasty situation developing in financial casino land. The curve has steepened since the last fed meeting and that can mean only one thing. The fed has no intention to ease until there is signifcant pain being felt in the financial system and the real economy. We are nowhere near that level yet. Default rates are still several standard deviations away from normal. Things could change in six months. More simply the sp is going to be at 1100 before rates decreases can be a serious thought.
I'm surprised that no one has noticed a steepening curve and a declining dollar. That is and should be a scary scenario.
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