Government Bonds believe more in the DE-flation or IN-flation story?

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The Trillion Dollar question seems to be...."Will the financial experiment by the Fed lead to increased IN-flation or DE-flation?" 

Government bond yields increased and prices fell, going into the QE3 announcement and the opposite has happened since.  Did this price action fool a few investors?

Now yields find themselves on rising support and bond prices at falling resistance.  Bond traders are a pretty smart group of people!!!

The next move in yields and prices should tell us a ton how this group feels, per which theme (Inflation/Deflation) they believe in more.

 

 

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