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Currently there is a lot of confusion on where to price debt risk
From Piedmont Capital’s e-newsletter, as they are discussing interest rate fluctuation with the concern over debt:
July 27, 2011
| Treasury yields increased this morning as concern is growing that lawmakers won’t agree on a debt limit in time to avoid a default. The market is currently waiting for a deal and for the moment doesn’t appear to know how to price in the risk (or perceived risk for those of you that
read last week’s article) of a potential default. Expect yields to be fairly stable until a debt limit deal is reached. |
