Taper!(?)

It’s ‘taper’ talk time again and here is a post that is only too happy to join the cacophony…

Dear Federal Reserve, please signal what would be at least a symbolic gesture to the market and pretend to tighten policy by beginning a tapering of long-term bond buying.  We know inflation is being promoted via ZIRP at the discount window and via money printing used for T bond and MBS asset purchases.

Now it is time to ‘taper’ and let long-term yields rise if that is what the free market wants them to do.  Given the decades-long limit at the 100 month EMA (AKA the deflationary backbone) potentially imposed by this chart, a further rise in yields is debatable anyway if all you plan to do is taper a bit.  The ‘Continuum’ in the Long Bond’s yield is at this would-be limit point after all.

tyx
30 Year Yield, Monthly

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