In general, the higher quality the debt, the lower the yield.? Also, the same applies to maturity for non-callable or prepayable debt.?? The longer the maturity, the higher the yield.? This is normal because longer debts are less certain, aside from well-financed governments.

So when the Fed tries to twist the yield curve it is no surprise that that the Treasury curve twists (for now) and the stock market panics.? The Treasury yield anticipates future purchases.? The stock market looks at the recklessness of the Fed, and prices stocks lower.? Prices Yields on low quality bonds go lower as a result.

The Fed is making a lot of noise, but does little for the economy as a whole.? The low interest rates it offers is only valuable to companies that don’t need help — high quality, those that have no difficulty borrowing.? The rich get richer, and the poor get poorer.? That is Fed policy, for now.

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Thanks to wsm for the correction on my piece.? I meant to say prices, not yields, in the last sentence of the middle paragraph.