Does Volatility Create a New Bond Market Order?

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Nov. 26 (Bloomberg) -- Nathan Sheets, global head of economics at Citigroup and Bloomberg Contributing Editor Barry Ritholtz examine the impact of monetary policy and volatility on the global bond markets. They speak on Bloomberg Television’s “Bloomberg Surveillance.”

Than spain and italy?

What we're seeing here is the u.s. monitoring policy nearing and in flexion point.

The fed over the next few months is likely to start tapering and that has created a bit of upward uncertainty in the tenure treasuries.

Under the hand, the ecb seems so settled into a comfortable stasis, where they're going to be stimulative for a long time and they would do further stimulus on the margin.

They won't be changing -- when you look at the u.s. policy and the idea of tapering, do you think of it as a single date for chairman yellen or chairman bernanke.

Do you see it as an devolution for two thousand 14? is very evolutionary.

The fed is going to respond to the data.

Both in thinking about when they start tapering but then once they start tapering they will be looking at the economy and looking at the performance of the treasury market and determining the pace of tapering based on what they see.

Very evolutionary.

Make another angle here that explains why voluntary -- u.s. treasuries are still primarily owned if not by the fed then by foreign governments like china and japan.

By all means.

That is a good thing and a bad thing.

When you think about domestic ownership of the italian and spanish government securities, a lot of that is in the banking sector.

I think that makes the banking sector more normal than otherwise.

Berry, fold in nathan sheets' policy into investing.

Do all have to look at what chairmanyellen is going to do?

They have told us about inflation.

Their toes about -- we remember the beginning of the year you and i had a conversation i said if he hadn't refinanced your mortgage you better start now.

? what did you learn in the bond ugliness in the summer, in august?

Vigilantes aren't dead and they're happy to front run the fed if they can.

In the second, nothing beats a latter bond portfolio.

You better not put it all in black and spin the wheel.

You have to be thinking a shorter duration but having things come out year after year as opposed to making that all in debt.

Nathan and there you both touched on this.

What is -- what does the volatility in the bond market say to the u.s. consumer?

What is the impact on the real economy?

That is a good question.

I'm not sure.

On a black friday -- i don't know if the people swarming wal- mart further $69 200 inch tv or hitting the malls really are looking at that.

I think the people that the credit rating and the income to refinance have and the people who can pay down their credit card debt have heard everybody else's in a different zone.

Where i think we have seen a most important macroeconomic effects as been on the housing market where mortgage rates have gone up significantly relative to early this year.

The housing market is not as strong as it was early this year . there is very much a wait and see in terms of the impact of mortgage rates.

What about the fact that mario draghi has gone through all of this with soothing words and not necessarily action.

Will he be able to continue doing that through words alone?

Mario draghi's verbal interventions i think have been the most effective in the history of central banking.

Truly extraordinary what he has been able to achieve.

But it is going to be hard to continue to just do it with words.

If you want to provide additional significant stimulus to the euro economy, easy going to have to do more.

I'm not sure the germans are going to let him.

Citigroup this morning on bond volatility.

Worry, angst, it is another wall of words.

Coming up on "surveillance." if you're 21 and you happen to

This text has been automatically generated. It may not be 100% accurate.


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