“There are a couple more ominous reasons for the decline in 30-year prices, one of which is the reduction in demand from China, and a small worry about the credit worthiness of U.S. debt going forward,” said Jim Iurio, managing director of TJM Institutional Services. “Is the steepness in 2 to 30's good news? On balance…yes, but not resoundingly so when you consider all aspects.



We’ll get some clarity on what exactly this phenomenon means on Friday, when the government reports it’s initial reading of fourth-quarter GDP. Weekly jobless claims are out on Thursday.

Some investors say an unprecedented financial move like this during unprecedented financial times like these calls for an unprecedented financial conclusion. Nicholas Colas, chief market strategist for BNY ConvergEx Group, posits that we could see inflation and deflation at the same time. For example, food prices could rise, but housing and wage prices could stagnate as unemployment remains high. That could cause the Fed to remain accommodative on the short end.

“What’s different this time is easy to see: the Fed sees a lot of slack in the economy, which threatens deflation,” said Colas. “The overall CPI numbers are anchored by housing (42% of CPI) so food and energy inflation may be all we get. And that may not be enough to push the core higher. Which means the curve may steepen further this week, especially if GDP is good and the initial claims data is better on Thursday.”

* For the best market insight, catch 'Fast Money' each night at 5pm ET, and the ‘Halftime Report’ each afternoon at 12:30 ET on CNBC.

______________________________________________________

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Trader disclosure: On Jan. 24, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Adami's wife works for (MRK); Terranova Owns (UPL); Terranova Owns (VRTS); Terranova Owns (PVH); Terranova Owns (GM); Terranova Owns (CVI); Terranova Owns (CNQ); Terranova Owns (LTD); Terranova Owns (C); Terranova Owns (PEP); Terranova Owns (CPX); Terranova Owns (ARUN); Terranova Owns (MS); Terranova Owns (RSH); Terranova is short Gold; Weiss owns (UUP); Weiss owns (TBT); Weiss owns (QCOM); Weiss owns (MXIM); Weiss owns (VZ); Weiss owns (WFR); Weiss owns (JPM); Weiss owns (MEE); Weiss owns (BTU); Weiss owns (FAS)





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