Swap Yield Curve thoughts by David Merkel – Monetary Policy is Loose — The Yield Curve is Steep – … The interest rate swap market is big — very big.  It allows parties to exchange a fixed yield over a period, for a floating rate, 3-month LIBOR [London Interbank Offered Rate], or vice-versa.  …  Personally, I find swap rates more comparable across countries than sovereign obligations.  Why?  The maturities are more similar, as is the credit quality. … more  – The Aleph Blog 

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Bernanke Conundrum Threatens Housing on Mortgage Rate – By Liz Capo McCormick and Dakin Campbell – The biggest price swings in Treasury bonds this year are undermining Federal Reserve Chairman Ben S. Bernanke’s efforts to cap consumer borrowing rates and pull the economy out of the worst recession in five decades. – Bloomberg

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must read many charts – Update: A Tale of Two Depressions – Barry Eichengreen   Kevin H. O’Rourke – Editor’s note: The 6 April 2009 Vox column by Barry Eichengreen and Kevin O’Rourke shattered all Vox readership records, with 30,000 views in less than 48 hours and over 100,000 within the week. The authors will update the charts as new data emerges; this updated column is the first, presenting monthly data up to April 2009. (The updates and much more will eventually appear in a paper the authors are writing a paper for Economic Policy.) – Voxeu.org
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Interest Rates: Take that, Krugman! – History lesson for economists in thrall to Keynes - By Niall Ferguson – John Mauldin’s Outside the Box E-Letter

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Read this, then read the first 2 comments: The Sound and the Fury of Bond Market Vigilantes -  Said Haidar – Seeking Alpha

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10-year Inflation Worries – … I want to drill down into the upper-right graph. We don’t need to “guess” what the market thinks of inflation; the market tells us. Here is the upper-right graph reproduced …  Inflation is simply the 10-year Treasury Notes minus the 10-year TIPS. The only difference between the two lines above is that the TIPS principal is adjusted for inflation. So the difference is the market expectation of inflation – if it wasn’t, we’d expect arbitrage to bring them into line. … – Rortybomb

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The Fed’s Mortgage Muddle - By David Bogoslaw – Despite the central bank’s efforts, rates are rising just as the housing market struggles to find its feet – Talk about a negative feedback loop: It looks like investors’ expectations for an economic recovery could end up delaying that very scenario. – BusinessWeek

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Why Are Other Yields Falling as the Treasury Bond Yield Rises? – Paul Kasriel – Northern Trust 

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Get Ready for Inflation and Higher Interest Rates By ARTHUR B. LAFFER – The unprecedented expansion of the money supply could make the ’70s look benign.  Rahm Emanuel was only giving voice to widespread political wisdom when he said that a crisis should never be “wasted.” Crises enable vastly accelerated political agendas and initiatives scarcely conceivable under calmer circumstances. So it goes now … But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years … – Wall Street Journal Opinion