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Rather Than Crediting Bush, Media Will Sit Out Recovery.(ISSUES & INSIGHTS)(VIEWPOINT)
Byline: LAWRENCE KUDLOW
Monday's Wall Street Journal tried to argue that the headline-making Treasury bond sell-off is "technical" and does not imply stronger economic growth.
Consider this analysis par for the course. These days, it seems that nothing can sway the major media into believing that a more robust recovery is on the way.
Since June 3, the bellwether Treasury bond that matures in 10 years has lost nearly 10% in price as its yield unexpectedly jumped to 4.3% from 3.1%. Bond rates typically rise during recoveries and fall in recessions. During the economic and stock market slump that began in early 2000, Treasury rates plummeted to nearly 3% from almost 7%.
Now there's a hitch in the recent Treasury development.
Cash Flow
Beginning last May, Fed Chairman Alan Greenspan argued that to ward off deflation, the Fed might make special purchases of Treasury bonds, and thereby inject more cash into the financial system.
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