Fed Keeps Buying

“QE2 is still bullish and yields should decline in the next few months as the Fed keeps buying,” says Mr [David Ader].

“Rates can still go higher if existing holders decide to part ways with their Treasuries and head to greener pastures like the stock market,” says William O’Donnell, strategist at RBS Securities. “We have a Fed that is trying to reflate and at some point they may get traction.”

For this reason, strategists will be watching closely forthcoming data releases. “It does seem this is the time to take a serious look at getting back into stocks,” Mr [Michael Kastner] says. “If we see positive sales and consumer activity at the holiday sales, it may be hard to keep yields low.”

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