0517 GMT - The Federal Reserve is caught between an inflation mandate that is still above target and would call for higher rates, and a president who continues to say that rates should be falling, Thornburg Investment Management's Lon Erickson says in a note. "Those positions don't line up," the portfolio manager says. The right move, in Erickson's view, would be to raise rates because it would signal to the market that Fed Chairman Kevin Warsh is serious about getting inflation under control. "If the market gains confidence that the Fed is serious about getting inflation under control, some of the risk premium could come out of longer-term bonds, pushing rates lower."
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