Clive Hale: Let's twist again…
The Federal Reserve's latest cunning plan seems to have been misinterpreted by many, but not by Mr Market. This is less of a money-printing exercise, á la QE1 and QE2, than an attempt to flatten the yield curve.
The Fed has a stack of short-dated bonds, so it is going to sell $400bn of these and buy longer-dated issues with the proceeds. Borrowing rates are priced off the long end of the curve, so theoretically...
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