Overbought Treasurys Sputter, Even With a Fresh Fed Intervention
Wait, what? The almighty Fed couldn't shock the bond market back to life by announcing it would partake? I'm shocked.
The U.S. government debt market cooled a bit on Tuesday, as traders booked profits after a Monday rally that sent longer-dated yields to their lowest in about 16 months.
The market pullback was also fueled by some rotation back into stocks and other risky assets after encouraging U.S. and European corporate earnings, analysts said.
Stronger-than-expected readings on U.S. industrial output and a higher than forecast producer price inflation soothed some fears of deflation, exerting downward pressure on bond prices, but they were not enough to dispel the notion that U.S. economic growth is waning.
"The market was particularly overdone in the past couple of sessions. We are just seeing an unwind of some of those trades," said Alan De Rose, head government trader at Oppenheimer & Co. Inc. in New York.
You wonder if they actually realize that their harebrained schemes will no longer work or if they believe somehow they're going to be able to pull out of this one. Markets know best.
I'm thrilled to know I'm not the only one of the "yawn" opinion.