NYSE strategist says market's reaction to Bullard's 5%-7% rate estimates 'was a bit overblown'

The Treasury market "may have been getting ahead of itself," with most yields up by at least 8 basis points each in reaction to interest-rate estimates from St. Louis Fed President James Bullard, said Michael Reinking, senior market strategist for the New York Stock Exchange. In an email, Reinking wrote that Bullard "has been ahead of the curve in this cycle which is why markets have paid particular attention to his comments." However, Bullard's estimates indicating that the fed-funds rate needs to rise to between 5% and 7% to reach a sufficiently restrictive zone "is based on economic theory and is not a view held by the Fed at this point," Reinking said. He called the reaction "a bit overblown,'' and also cited the U.S. Dollar Index which briefly rose 0.6%. The 10-year Treasury yield climbed 9 basis points to 3.78% as of Thursday afternoon.

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