The Veridian Blog

When Ben Bernanke stated last Wednesday that the Fed is prepared to keep interest rates at record lows until the end of 2014, I had to do a double-take to make sure I wasn't losing my hearing.  It was already an unprecedented statement last year when he merely forecasted low rates into 2013, but now, we are truly in unchartered territory.  The implication is that the housing glut is a long-term issue and any hope for a speedy recovery have long since evaporated.

This was somewhat confirmed this morning when Consumer Spending for December reported a disappointing, lower-than-expected increase of ZERO.  Despite rising incomes, consumers are opting to save more than before.  The benchmark 10-year Note has fallen 1.86% as a result of the report, as well as continued woes in Greece and Europe.