“The sell-off in Treasury bonds has sent yields racing higher over the past few weeks, and no one really seems to be sure of exactly what is driving the move.
It even caused Bill Gross, who runs the world’s biggest bond fund at PIMCO, to pitch a strange explanation for the move on CNBC yesterday: that Paul Ryan was helping to drive the latest sell-off in the bond market.
BofA fixed income strategists Priya Misra and Shyam Rajan chalk up the drop in bond prices to three main factors – relative stability in European financial markets recently, better economic data out of the United States, and mortgage originators hedging against interest rate risk now that rates have begun to rise due to the first two factors.”
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