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Options Trading

As prices of commodities such as gold and oil rise, “investors are pricing in relatively high inflation even though growth is slow and the Fed is likely to continue to move the fed funds rate lower,” said Michael Pond, an interest-rate strategist at Barclays in New York.
It was the first foray below zero since five-year TIPS were first sold in 1997, according to the firm, one of the 20 primary dealers that trade directly with the Federal Reserve.
“The collective investor mindset or psyche is just so fragile and volatile that things can change on a dime,” said Kevin Flanagan, a Purchase, New York-based fixed-income strategist for Morgan Stanley’s individual-investor clients.
“You’ve got the double worries,” said Ray Remy, head of fixed income in New York at Daiwa Securities America Inc. “One is the economy and the second is inflation, and that’s why you’ve got a steep yield curve.”
“Bernanke has really overweighted the economic risks relative to inflation,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, following the Fed chief’s testimony to Congress yesterday. “He may get some disagreement” among colleagues on the Federal Open Market Committee, Silvia said.
“We do face a difficult situation,” Bernanke acknowledged. Oil and food prices have been climbing “rapidly,” and there are “slightly greater upside risks to the projections” for inflation now than a month ago.

Seems fitting somehow in regard to things escalating