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| | Morgan Stanley (Site not responding. Last check: 2007-11-03) |
 | | What I see in 2005 is a year of immense volatility in the currency, bond, and equity markets, resulting from a world that struggles to reach a consensus on how to cure its ills. |
 | | This year, however, it has stuck to a “measured” policy despite these tailwinds that continue to propel the economy forward, magnified by the search for carry and yield in response to the Fed’s go-slow approach that has further driven the spread compression and rally in long and intermediate yields. |
 | | A year from now, if we assume the fed funds rate were at 4.5%, the one-year-ahead eurodollar future at 5.5%, and that current inflation, inflation expectations, and employment growth were maintained near current levels, then the fair value 10-year yield would be roughly 5 3/4% at the end of 2005. |
| www.morganstanley.com /GEFdata/digests/20041217-fri.html (14224 words) |
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