While some are citing the Trichet comments on Greece for topping out the US stock market today, I believe it is solely the action in the US bond market following the 2nd day in a row of poor auctions. We all know Greece is getting help no matter what, it’s just a matter of what form it comes in. Higher interest rates just as the Fed is ending their QE program create a major challenge to an economy that is still fragile and trying to get its traction. Coincide higher rates too with the end of the home buying tax credit with still high inventories and the housing market will immediately be put to the test. Mortgage rates are up 17 bps in just 2 days.
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