" 'Stranger and stranger,' said Alice," and so it was this week at the Federal Reserve, in Europe, and in President Obama's State of the Union address. Some brave souls thought the Fed would surprise by rolling out "QE3," a third round of quantitative easing, and begin to buy more mortgage-backed securities, driving mortgage rates down. Everyone expected a pair of meaningless inside-Fed jokes (more transparency, and an inflation target), and we got those.Nobody expected this: to extend the Fed's zero-percent rate from 2013 to the end of 2014. Bonds have rallied, with 10-year Treasurys back down to 1.92 percent and mortgages close to 4 percent, and markets still adjusting.Bernanke's term expires a year before the end of the new zero-rate period! 2014 is so far off in the economic future that nobody can know its conditions, but you can bet -- bet a lot -- that the Fed would make a three-year commitment only if it is seriously worried.That anxiety has penetr...
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