There are a lot of crosscurrents now, but falling yields might indicate that demand for credit is slowing down and that the Fed, by holding the fed funds rate where it is, is actually keeping rates all along the curve from falling to their equilibrium level, or to the level where would they would more naturally go.

The Fed is a price fixer; it fixes the price of short-term credit. If there's an increase in demand for credit, interest rates want to rise. But because the Fed is fixing the price of credit to keep rates from rising, it has to create more reserves or allow banks to create more money, and that's what leads to bubbles.

Economists are notoriously bad at predicting turning points. They're like credit ratings agencies, they don't anticipate things very well.

It's all Microsoft, ... The broad sell-off in the techs is because Microsoft spoke about [slowing] demand.

I guess you could (say) that the Fed sees the light at the end of the tunnel. They believe that they have taken a lot of accommodation out of policy now.

And rates are not likely to be adjusting downward. Households are paying about 13.75 percent of their aggregate tax income to service debt -- and it is going to go higher.