Interest Rate Roundup

Friday, June 23, 2006

Treasuries keep getting pounded

How does Bloomberg describe this hammering? The headline says it all:

"Treasuries Head for Worse Slump Since 1984 on Fed Rate Concern"

They're measuring "worst" in terms of number of days in which bonds have fallen. That's up to eight. But while the cumulative decline has been awful (about two points in 10-year Note futures), I haven't seen much in the way of "panic days" -- big declines on heavy volume. It's almost like traders are saying: "Oh well, guess we better get yields up to the fed funds rate we'll have next week" (which is expected to be 5.25%).

Could that mean we have even MORE downside? Without a crescendo wash-out type scenario where all the bond sellers get cleaned out, maybe.


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