Hoey also continues to expect a three-phase upward adjustment of bond yields over a half-decade period, as outlined in the report entitled "Interest Rate Normalization" dated September 12, 2013. The first phase is an adjustment to free-market levels from artificially low bond yields, which reflect an artificial scarcity of bonds due to large scale bond purchases under QE3.
"This adjustment is underway, but in a choppy pattern, due to the Fed's 'Hamlet syndrome' about beginning the tapering down of QE3. To taper or not to taper? That is the question," Hoey concludes.
for Hoey's complete "Seven Year Expansion" Economic Update.
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