The rise in bond prices may have been kicked off a week ago by deficit fears but the slide in gold in the last few days ($1407 to $1362) tells me that the rise is now being driven by upbeat US economic data and expectations for faster growth ahead.
Whether the growth materializes is an open question but it does appear as though the Fed’s forecast fro growth is at the low end of the range….
When rates rise for the right reasons, the support the currency, as the dollar is proving today.
When they rise of the wrong reasons, it undermines the currency. Look no further than Greece..
