To the degree that it’s true, the idea that the US economy is recovering is a catastrophic notion for the financial markets.
Surprisingly, the withholding tax data supports the idea that a small number of jobs did come back in May. The problem is that the bond market reacted as if a big recovery is on the way. Investors and traders, made a mountain out of a molehill. Bond prices plunged and yields soared. This is exactly the opposite of what the Fed and dealers wanted and needed. If it’s not reversed immediately, to say that it will be problematic would be an understatement.
Here’s what you need to know.
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