Lately, the Fed has been using the following phrase: "Return to Normalization." Exactly what is the Fed saying from the use of that phrase? Well, I believe it is an euphemism for a return to "higher interest rates" from the current artificial low rates instituted by its Zero Interest Rate Policy (ZIRP) over the past six years. Yes, I still believe that the pending Sovereign Debt Crisis will cause a flight to Treasury Bills and Notes. The consequence will be for interest to decline. However, in order to protect financial viability of local and state pension plans, the Federal Reserve System will have to raise rates. How soon should the above scenario start to play out? By guess is, of course, 2016.
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