16 Quotes by Dominic Konstam

The bid-to-cover improved a lot, reflecting a reasonable appetite for the two-year notes.

They have to tread carefully, they don't need to raise rates so they become restrictive as there is no inflation, so they are fumbling for a neutral funds rate.

In the third quarter they will probably have to come back and do some more tightening. As things stand, they haven't really done enough to slow down the economy and get rid of inflation risk.

Claims took people by surprise. It makes it clear the Fed has not gone too far.

The inflation story embedded in this report is really not that bad. People are coming back into the labor force and wage pressures aren't showing, so this is generally good for bonds.

The front end of the curve tried to rally a little bit and there was a trade down in the belly of the curve. We expect the Fed to cut rates another quarter-percentage point in January and for federal funds to be at 1.5 percent in the middle of 2002. We're looking for a recovery in the third quarter of next year.

The market is basically ignoring it. It's just the fact we've already sold off so much.