Picture 1oo people in a room, trading billions of dollars and with no idea of what’s going on. That’s Wall Street at the moment.
The latest is the Hilsenrath article isn’t even dovish. Was anyone really thinking Bernanke was about to hint at rate hikes next week? The article is actually hawkish because it sortof confirms that the Fed is planning to taper.
In any case, the bond market went bonkers after the story because one of the 100 monkeys in the room yelled out ‘dovish’ when the article hit.
What’s happening in the market is the building expectation the Fed will push out tapering expectations.