Interest Rates Rise

Interest rates spike up
When bond yields and stock prices rise together, I would usually read that as a signal of rising investor optimism about future real economic activity.

This week, some investors turned up their noses at three big U.S. Treasury offerings. Demand was weak for a $44 billion 2-year note auction on Tuesday, a $42 billion sale of 5-year debt on Wednesday and a $32 billion 7-year note sale Thursday.

The poor demand, especially from foreign investors, sent the bonds' prices sharply lower and yields higher.


Barclays offers 3 treasury ETFs. They are:

iSHARES Lehman 20+ Year Tsy Bond Fund (TLT),

iSHARES Lehman 7-10 Year Tsy Bond Fund (IEF),

and iSHARES Lehman 1-3 Year Tsy Bond Fund (SHY).

Paul Krugman is not concerned:
Perspective On Interest Rates

Looking at the chartsI can only see a wide trading range so far. Prices are still higher than last summer....