Market jitters were calmed this week by Federal Reserve chairman Ben Bernanke's testimony before Congress. Bernanke said he expected inflation to ease in the coming quarters, which was read as a signal that the Fed would pause after another increase in rates in August. Yields fell after these comments and swap spreads followed suit. Medium term levels came in by around 0.75bp on Wednesday after the testimony, and by the close yesterday the 10 year was close to 2bp inside the high prints of the week.
July 21, 2006
