CHAT: The Fed Does Not Want These Higher Yields

The central bank made a careful nod to improvements in the US economy yesterday. It was slight, but market participants took that acknowledgement and ran with it. Yields are shooting higher. But higher borrowing costs is the last thing the Fed wants, especially ahead of the spring home selling season. "Housing is the Achilles heel of the recovery and Bernanke is not about to let borrowing costs move too far against him," says TD Securities chief US rates strategist Eric Green. Higher rates also spell trouble for the US' tremendous debt load. "This is an appropriate re-pricing of rates as all the factors that compressed yields to record lows give way," Green says, but sellers beware of the Fed's looming presence.