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Convergence of events moves interest rates

Commentary: Debt is a sideshow in European crisis

A group of colleagues asked me two weeks ago what interest rates were going to do. I answered in an authoritative voice, "They've been in the same place for seven months -- it'll take an earthquake to move them."Ahem. The opinion was correct, but I was clueless about the proximity of the quake. An "F" for that. In one week the Fed announced no MBS-buying QE3, U.S. economic data improved, and Europe re-re-floated Greece. Until one or more of those three things change, technical analysis is the usual guide, looking for chart-pattern "support." There is none of that, either. The 10-year T-note fell from 3 percent last August to 2 percent in a single, straight-line month, and spent very little time north of 2.15 percent in the next seven months. Having now blown up near 2.4 percent, 10s are in Never Never Land, likely to wander in a wide range until something happens, mortgages 4.25 percent or more.So, while waiting for something to happen, let's explore what ...