Atlanta Fed President Lockhart, a relative hawk, frets that some of the bond rate back up in recent weeks is tied to the fear that the Fed will monetize the debt. He warns that fiscal imbalances will make the Fed’s pursuit of stable growth and prices more difficult.
US equities are firmer and bond yields are lower and oil maintains its strength, at 72.80 per barrel. Look for 1.4145 to cap near-term. Stops lie above that level. The euro has reached 1.4130 thus far and now trades at 1.4120. Medium-term bulls are praying for another move toward the 1.43 level to lighten up their long positions.
