Is QE2 Good for CRE?
“In spite of their security purchase plans, the Fed has not been successful in keeping long-term Treasury yields low. As the yield chart above indicates, 10-year prices have been falling in spite of the Fed’s buying spree (remember, yields go up when prices are falling). The Fed’s argument is that the recent stimulus packages approved in tax legislation have given investors a bullish view on the economy. Investors have therefore taken money out of Treasurys to put into stocks. The second major criticism of the Fed is that QE2 has not kept inflation in check as was intended. Prices at the gas pump are skyrocketing and it seems that every day we go to the grocery store we end up spending the same but getting less food. Between rising Treasury yields and soaring oil prices, it’s not clear that QE2 is working.” Read more.
Llenrock Blog, January 5, 2011.
