11/10/09

Yesterday (Monday) we saw the equity markets rally nicely. Helping the interest rate markets was a record $40 billion 3-yr Treasury auction that went well.
There is no data but we do get three Fed officials today; Lockhart (Atlanta Fed President) already this morning saying unemployment will stay high for a long time. Not news but reiterating the rationale that the Fed will keep interest rates low for much of 2010. We caution however, not to take the meaning that mortgage rates or long term treasuries will stay low. The Fed will likely keep the Federal Funds rate low but market factors could drive long term rates up while short rates stay firm.
Let me know if you have any questions.