December 14th, 2010 4:27 PM by Eric Fang
One of the goal of QEII is to get the inflation of around 2%(The another goal of stock going up). That's what the Fed want to see.
The bond traders are worried recently about the inflation and selling the bonds, and if the inflation is imminent and the traders are right, then Fed should be happy.
The only thing is that in the history, there is never an inflation when the unemployment rate is around 10% to 20%. So personally I think the bond traders are over-worried.
Also, a lot of buyers are delaying the purchase recently because of the higher interest rates. So the without the recovery of RE market, the economy growth will not be fast enough to create enough jobs to reduce the unemployment rate.
Let's wait till Jan and Feb to see more data for the confirmation. It's really pain to see the rates going up everyday.