Despite mangled policy, US economy growing toward fiscal repair

Interest rates have stopped rising, but after a move as violent as this, markets should have improved. They have not.

Central bankers have fallen all over themselves to reverse Bernanke’s Bungle: Draghi at the European Central Bank, King at the Bank of England, five regional Fed presidents and two governors, all to no result.

The 10-year T-note straight-lined from 1.63 percent in early May to 2.6 percent, now stuck at 2.5 percent, mortgages 4.5 percent or more.

Neither bad days in stocks nor weak data have had the power to push down rates. First-quarter GDP was revised from a pinking 2.4 percent to 1.8 percent, entirely because of overmeasured consumer spending.

To the bond market, the central bank choir is absurd, each speaker insisting that policy has not changed, but that growth will increase a lot in 2014, and that just because the Fed will not be as easy as it was, it is not tighter.

Fool me once, shame on you, fool me twice, shame on me.

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