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President Obama Extends Tax Cuts
12/07/2010
President Obama agreed to extend the Bush tax cuts for two years which, an economist at Barclay’s stated, "puts less of an onus on monetary policy to actually stimulate the economy"; stock futures are up sharply, Treasuries and mortgages are down. There is a $32B 3yr note auction today, a $24B 10yr note auction tomorrow, and a $16B 30yr bond auction on Thursday. Right now, the futures market is pricing in a 92% chance that the Fed keeps rates between 0% and 0.25% through March 15th, 2011. Currently, the Ten Year yield is at 3.02% (2.95% yesterday) and the 2-10 yield spread is at 257bps, steepening 7bps since yesterday morning.
