The bond market is defying Wall Street forecasters, as long-term Treasury yields continue to head lower despite a strong economy and rising inflation. A decline in bond yields, which move opposite price, can be a sign of expectations for a weaker economy. But strategists say it’s not just slower growth concerns that’s driving the move. Momentum and positioning are also playing a role, as are some technical factors. “It’s confounding,” said Michael Schumacher, director of rates strategy at Wells Fargo. “You’ve got some number of big players who for various reasons are pretty comfortable with the thought that economic growth is, I would not say weak, but not as spectacular as some people expected.” The most closely watched U.S. interest rate metric — the 10-year Treasury note yield — again skidded below 1.3% Thursday, a level where it last traded in February, prior to last week.
Source: CNBC – Bonds
