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| Khall: I think your analysis is spot on. Short rates will be held down by the Fed due to the weak domestic economy. Long rates will probably come down some more due to the problems in Europe. The EU continues to merely kick the can down the road. Major structural changes have to occur in the EU. That leaves the US with a stronger dollar (bad for exports) and a slowing world economy (also bad for exports). The safe haven of investing in the US will create more demand for US assets including the 10 year Treasury even though it is currently trading at 1.51%. | |
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