Wednesday, November 09, 2005

Changing of the Guard

US Treasury yields have jumped today. According to Bloomberg, approximately 50% of Treasuries are held by foreign holders. It appears that there is a slight stall in Treasury purchases, which would explain this jump on the yields. We will need to keep an eye on the countries that hold large shares of Treasuries such as Japan, China, South Korea and oil producing countries.

On the homefront, we are currently going through a transition period as many observe the various forces that will steer not just the US economy but the global economy as well. Many wonder how well Mr. Greenspan will pass the baton over to Mr. Bernanke. This transition should be relatively smooth, but will the new Chairman push towards a formal “inflation targeting” policy? Will there be a closer tie between the Treasury and the Federal Reserve? Only time will tell.


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