My impression is that the market assumes the Fed will stop tightening early and may not even raise in November because of the impact of Katrina. Thats why the 10 year yield is down so much in the last couple of days.
We will have to wait and see what the damage impact is --- if the Government releases oil from the reserve that might remoev some of the Fed's concerns about overtightening. Tragic as these events have been, I do not see yet that the impact on the whole US economy is going to be that major.
My impression is that the market assumes the Fed will stop tightening early and may not even raise in November because of the impact of Katrina. Thats why the 10 year yield is down so much in the last couple of days.
We will have to wait and see what the damage impact is --- if the Government releases oil from the reserve that might remoev some of the Fed's concerns about overtightening. Tragic as these events have been, I do not see yet that the impact on the whole US economy is going to be that major.