Bond Investors Ready To Push Yields Lower As Cash Floods The Market

Bond Buyers are hungry and not just for Argentinian sovereign debt

With the Federal Reserve hiking interest rates, economic growth picking up, money flooding into equities and monetary policy normalizing around the world, traditional financial theory dictates that bond yields should be rising.

However, precisely the opposite is currently happening. Indeed, the divide between the Fed and bond market is getting wider by day. Fixed income traders have pushed the yield on 10-year Treasury notes down to 2.17% down from 2.63% in March. According to a recent opinion piece on Bloomberg, this move is traders trying to “force the central bank to back off its hawkish stance.” What’s more, “the current levels of long term yields suggest traders have...