If today's employment report is weak, short rates could fall again.

"So in that sense there is no need to lower short rates," he added.

If short rates come down, in the fall we will have another rally.

But short rates will probably stay in a trading range.

However, they have to form expectations about future short rates.

He said that the central bank would raise short rates again if the rate of inflation picked up.

The market continues to be one in which short and long rates are very different species.

Short-term changes in domestic short rates also play an important role.

The Fed doubled short rates in 1994 and has really given very little of that back.

This would take some pressure off both short and long rates.