What me Worry World

It would seem that the perpetual QE world we live in has given way to an Alfred E. Neuman “what me worry” world. If the absence of fear is complacency, what might the complete eradication of fear be termed? Such lack of concern is evidenced by the market’s nonchalant attitude in the face of the  childish behavior currently on display in Washington. While it is true that we have seen some back up in short bill rates, the Bond Market response has been anything but strong. This complete inattention on the part of the Treasury Market to a quite disturbing discourse on both sides of the aisle leads us to believe that there is no need for vigilantism when you have a Central Bank taking down 70% of the issuance. In its quest to keep rates perpetually low, the Fed has not only clamped down on the front end of the curve, but also on any reasonable sovereign credit analysis.