Bond bears are racking their brains for the reason that the 10-year note yield is not jumping higher, even as the Federal Reserve starts to drain the punch bowl with a $10 billion monthly tapering of its bond-buying pace, to $45 billion in May.
“The fact that Treasury yields have barely budged during this period suggests that a major player has taken the other side of the trade,” said Bank of America’s David Woo.
Woo believes heavy Chinese buying in Treasuries is stymieing the Fed’s desire for higher rates, Market News International reported.