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Tuesday, February 01, 2011 12:26 PM

Bernanke Reports "Good News" on Inflation Targets; Treasury Selloff Continues on Strong ISM; 2-30 Yield Spread at Record

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Treasuries Decline on Strong ISM Numbers

With a stronger than expected manufacturing ISM numbers, especially prices paid, U.S treasuries continued their slide.

Manufacturing continued to grow in January as the PMI registered 60.8 percent, an increase of 2.3 percentage points when compared to December's seasonally adjusted reading of 58.5 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

The ISM Prices Index registered 81.5 percent in January, 9 percentage points higher than the 72.5 percent reported in December and the highest reading since July 2008. This is the 19th consecutive month the Prices Index has registered above 50 percent. While 64 percent of respondents reported paying higher prices and 1 percent reported paying lower prices, 35 percent of supply executives reported paying the same prices as in December.
Bernanke Reports "Good News" on Inflation Targets

Today's Treasury Selloff

Yield Curve Spread 30-Year Yield Minus 2-Year Yield

Monthly Yield Curve Since 2001

click on chart for sharper image

  • $IRX 03-Mo Treasury Yield
  • $FVX 05-Yr Treasury Yield
  • $TNX 10-Yr Treasury Yield
  • $TYX 30-Yr Treasury Yield

The chart depicts monthly CLOSES of treasury yields. Unfortunately E-Signal does not have a symbol for 2-year treasuries. StockCharts does, but it cannot produce that chart.

The yield curve is artificially steep as Bernanke continues to rob savers for the benefit of banks.

For thoughts on how Bernanke is hurting those on fixed income, please see Hello Ben Bernanke, Meet "Stephanie"

Mike "Mish" Shedlock
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