Saturday, July 3, 2010

Flash from Bank of America

It appears that someone else agrees with me that interest rates will stay low for an extended period of time.

Dan Perkins

Interest Rate Committee Forecast

Bank of America Merrill Lynch

Slower growth, lower rates Later Fed, lower 10-year yields

We now expect the Fed to be on hold until early 2012 and the 10-year yield to end
the year at 3.25%. The new outlook reflects weaker growth, somewhat lower
inflation, the continued lack of supply of high grade paper, and the potential for
fiscal restraint in the US. In addition, we expect overseas demand for Treasuries
to get even stronger, as reserve managers likely increase allocations to USD, and
thereby Treasuries. However, we do not see a double-dip in the economy and we
do not expect the Fed to adopt quantitative easing any time soon.
Economic Analysis
Economics | United States
02 July 2010

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