Monday Market Commentary

by Alex Stenback on December 12, 2005

Dec_8th_rate_chart
                                                         Graphic Courtesy MSNBC
Last Week
Rates mostly held their ground, with some very slight increases.  Treasury auctions were moderately bid, and the sentiment that the Fed will soon be finished hiking rates – with one maybe two more hikes already priced into the market – seems fully discounted.
This Week
The Fed meets tomorrow, and will add the .25% to short term rates that all expect.  Rate direction going forward will be driven in large part by any "guidance" in the statement accompanying the rate hike – if an end to rate hikes is telegraphed, the stage will be set for steady to lower rates in the coming months; if the door is left open for further hikes in 2006, we’ll most likely see rates start to rise again.
ยท This Week’s Economic Calendar [barrons.com]

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