When Bernanke broached the subject of tapering in June, the market took it as a tightening signal and interest rates on 10 year Treasuries went up as bonds were sold and money moved into stocks. Money also moved out of emerging market economies back to the mothership. When the Fed did not perform the expected tapering yesterday, interest rates went down but not back to where they were in June. The stock market went up again.
Interest rates and the face/vase problem by Scott Sumner
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