Fool™ named "inthemoneystock" noted that 10 year T-note yields spiked 5% over where they've been trading, and concluded from this that the Fed is "screwed."
I don't agree. I think the handwriting is on the wall for those who are paying attention. Fannie and Freddie are showing unexpected profits, causing Congressmen to get up in the aisles and make angry speeches. The FHA has just changed their rules, levying a giant 1.25% "mortgage insurance premium" surcharge for the life of their newly issued 30 year fixed mortgages, which makes it a lot less attractive to get an FHA mortgage. Buried in the back pages, student loan debt, which was fixed at 3.4%, will soon 'sunset' and reset to 6.8%, unless Congress acts, and most think Congress can't act on this particular issue. (Bear in mind student loan debt is the only debt that can't be discharged in bankruptcy! It's real debt.)
Others have called for more QE. But why? The markets are rising, corporate earnings look good, housing and Case-Shiller is way up from last year, unemployment numbers are hitting 5 year lows, and the price of gold is not going up. The next step for the health of the banks is that rates go up, so they can make a little money. And, just in case you had forgotten, Bernanke and the Fed Board of Governors are politicians. No, wait, they're captains of industry. No, wait, they represent labor unions. No, wait for it --
They are bankers. Never mind for a moment that they control the global economy. Recall who they are; they are bankers.
Greenspan used to hide behind Fedspeak and used the Fed rate as his major tool. I don't think Bernanke cares about the Fed rate much; he used it to puncture a Greenspan bubble and now is using a bunch of hidden tools under the name Quantitative Easing. I think Quantitative Tightening is now under way and leaving the dock, and I expect a rate hike at any time.