Cat Among The Pigeons

Rising interest rates have thrown the cat among the pigeons.

Global markets are in flux as they weigh the likelihood and the implications of an end to the interest rate cycle.

I think this is classic market "crisis" following the pattern from the last few summers. Equity markets had been on a tear and needed a timeout and it was only a matter of time before the market latched onto something to justify it.

Abe gave them reason to worry and Bernanke caught them by surprise.

I don't think CBs have abandoned the QE formula and will provide confirmation of that if the markets continue a more sizeable pullback, ie. 12%.

Now at some point in the future rising rates are going to be a real issue, but I think current palpatations are a little premature. With the 10 yr pulling back from 2.3% we might have seen the high in interest rates for at least the next 6-12 months.