The expansion continues.
The problem now is the flood of bonds from the US Treasury and the inability of the Fed to buy them.
Investors will now have to choose to buy long-dated bonds in a pre-inflationary environment.
The collapse of the bond market prior to the latest auction shows the markets are vulnerable.
At the first sign of inflation, bond buyers will be tempted to shorten asset maturities.
* * * * * J B K * * * * *
San Francisco
U.S. retail sales rose and industrial production powered ahead in April, further evidence the economic recovery was strengthening and broadening out.
Consumers were also a bit more confident early this month, adding to Friday's string of upbeat data that stood in sharp contrast to financial markets which sold off as panicky investors worried about Europe's debts.
http://www.reuters.com/article/idUSTRE63F2NT20100514?type=GCA-Economy2010
