Treasury Bears Capitulate as Fed Buying Meets Cliff Worry

Until last month, Donald Ellenberger, who manages $10 billion for Federated Investors Inc., shunned Treasuries as the U.S. economy improved and 10-year notes yielded less than inflation. Now, he can’t afford to stay out.

Ellenberger has plenty of company. Bond bears from Brown Brothers Harriman & Co. to T. Rowe Price Group Inc. are buying Treasuries though the 1.69 percent yield on 10-year notes is less than the rate of inflation and returns on the $10.9 trillion of marketable debt are the least in three years.