Archived IMT (2009.04.28)

CLARIFYING THE CONCLUSION of my latest article: Bond traders will be all over the statement accompanying tomorrows FOMC decision looking whether the Fed will step up its planned purchases of LT treasuries beyond the already announced $300 billion. If FOMC does so (and if it increases its purchases of non-treasury bonds), then bond yields could come off todays highs, which USD-negative, stocks positive and gold-positive. If Fed does not announce new purchases, then expect USD strength, stocks weakness and potentially neutral to positive gold. Treasuries' reaction will control the day.