Rates initially rose this week on a stronger-than-expected business inflation report Tuesday, but recovered after the Fed reiterated that they expect weak economic conditions to help keep rates lower for the near term. Rates end this week about the same as last week.
But it should be noted that Bernanke’s Fed is highly market oriented. Their post-meeting statements, like the one they issued Wednesday after their final 2009 policy meeting, don’t indicate this explicitly but the minutes of those meetings do. The minutes are very specific about how market oriented they are, and recent minutes describe how the Fed will look to raise rates by selling mortgage bonds and/or hiking overnight rates when they see more sustained economic improvement and/or
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