"Fair point RB, but are we talking recovery?"
Ophir, not according to you and I and Pimco's Bill Gross. But the market currently disagrees with us.
Listen to the interview below, skip to the 7.30 minute mark.
Gross says the market is now interpreting a 100 basis point tightening by the Fed by Dec 2015 and another 100 basis point rise in 2016. Gross is adamant that's not going to happen and Yellen will stay put at 25 points for several yrs. So buy 3,4 and 5 yr treasuries but avoid 10 and 30 years because they're inflation sensitive.
His comments make a lot of sense to me. This expected rise of front-end interest rates has killed inflation expectations this year in both USA and Europe. I posted a chart a few weeks ago and will try to find it again.
And you guessed it... this also happened in April.
http://www.bloomberg.com/video/pimco-s-gross-on-u-s-shutdown-debt-ceiling-t99_usVeQS63Wjk6Kyw56Q.html/
friday night , page-39
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