The vicious surge in bond yields over the past few weeks is drawing comparisons to bond-market selloffs of similar magnitude, most notably the ‘taper tantrum’ of 2013, but analysts say this analogy falls short in one crucial measure.
“At the time of the taper tantrum, the Fed was setting up to taper quantitative easing. We have not started the conversation yet at all,” Al-Hussainy said. That suggests that if expectations of a hawkish turn were actually priced into bond markets, the pain in Treasurys could have further room to run.Defining tantrums as episodes when the 30-year Treasury note yield TMUBMUSD30Y, 2.245% rose around 100 basis points from trough to peak, he noted three met that definition – 2013, 2015, 2016.
Throughout this week, senior Fed officials from Chairman Jerome Powell to Kansas City Fed President Esther George have underlined their commitment to supporting the economy through the pandemic.
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