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<p>[QUOTE=&quot;Clawcoins, post: 2913397, member: 77814&quot;]Essentially, the Fed tracks the Finance Rate <u>difference </u>between short term and long term debt.&nbsp;&nbsp; ie, 2yr and 10 yr bonds.</p><p><br /></p><p>Such as if you bought a car.&nbsp; You can get a 2 year loan or a 7 year loan. The longer loan will have a higher interest rate as it&#039;s a longer risk on the company giving the loan.</p><p><br /></p><p>Those differences between short and long term are shrinking.&nbsp; This stereotypically is part of an indicator of Inflation with Low Unemployment &amp; economic growth.&nbsp; But it&#039;s not yet as the European and Japanese banks are still buying up debt still like crazy to support their gov&#039;t economies; while the US Fed is easing it&#039;s purchases of debt to support the economy.&nbsp; Essentially the Global economy is stretching their knowledge of how to react to the inflation indicators as inflation isn&#039;t anywhere in the economy as a whole.[/QUOTE]</p><p><br /></p>

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