(Reuters) – U.S. stocks slumped on Thursday with the Nasdaq on track to confirm correction territory, as Federal Reserve Chair Jerome Powell’s remarks failed to soothe market worries about a jump in longer-term U.S. bond yields. The benchmark 10-year Treasury yield spiked to 1.533% as Powell did not comment on any changes in Fed’s asset purchases to tackle the jump. It still held below last week’s one-year high of 1.614%. Investors were expecting that the Fed might introduce Operation Twist in which the central bank shifts its bond purchases to the long end of the yield curve from the shorter end. “The market has been worried about the rise in long-term interest rates and the Fed chairman in his commentary didn’t really push back towards this increase in rates and the market took it as a signal that yields could rise further which is what has happened,” said Scott Brown, chief economist at Raymond James in Florida. Wall Street’s fear gauge touched a near one-week high at 28.16 points. The Nasdaq wiped out all of its year-to-date gains and was down about 10% from its record closing high on Feb. 12. Nick Note: In other words the bottom held. This trade has become a titty twister. A near death experience. All this crap about long interest rates rising is something we predicted and now have a trade for. Long rates have NO EFFECT on the stock market, Banks or business. They are ALL short term borrowers. Meaning they are creatures of short term rates as set by the FED. Investors (real Ones) and savers live up the hill in long rate land. The Yield cure has been flatter then a 8 year old school girls chest. But that baby is about to blossom into a pair of 44’s Triple D’s.
PS their is no inflation, their will be NO inflation… Its a freeging deflation that is reflating the dead man walking economy..