I saw her today, I saw her face
It was the face I loved, and I knew
I had to run away
And get down on my knees and pray,that they go away
Still it begins
Needles and pins
These lyrics seem to describe the market’s relationship with Janet Yellen and her FOMC board. When I blog about yield curves it seems to elicit the greatest response as traders are trying to position themselves in a low-risk, high-reward trade. There was a question on last night’s POST from RLD concerning the 2/10 curve and the possibility of buying bank stocks, if my thesis about a steepening curve reaction to QT is correct. This is an interesting query and reflects on the intelligence of the readers of NOTES. The mainstream media reports on the relationship of yield curves and bank stocks in a regular fashion and theorizes that the correlation is high: Steeper curves beget higher bank revenues resulting in higher bank stocks.T he correlation is far from consistent as bank stocks were making highs in 2007 even as the curve dramatically flattened.