So here we are 30 days after your blog post. Fed has sent out the Hilsy "taper" trail balloon and suddenly Rates back up 50bp, and 30yr mortgages at 4%. And stocks don't skip a beat. wow.

Just my opinion here.. but I do not think rates are backing up b/c economy is improving that much.. I think the backup is due to anticipation of natural rate/price discovery absent (or less) fed meddling.

What's interesting to note is that tomorrow we get PCE deflator (fed's fav tool to meas inflation) which is already at post recession lows... that will likely show falling aggregate demand (falling inflation) at the SAME time we are seeing a spike in interest rates.

Might this be a perfect storm for deflation? time will tell.. nothing like raising a little cash here.