Doug Short has an interesting table and graphic of the surge in U.S. Treasury yields after quantitative easing was announced, what he calls the QE2 Grenade. As you can see from the table below, the yield increases have been substantial.
Source: dshort.com
His conclusion:
…it’s probably too soon to write off the effectiveness of the new round of Fed Treasury purchases. But if a key objective was to keep interest rates low, the Fed’s “Hail Mary” pass appears to have been a grenade.
That’s just how Wall Street works. The policy effect that investors expect and what actually happens are often two different things. It’s critically important to have an investment process that will adapt to whatever the markets throw at you.
Posted by Mike Moody 
