Treasuries Risk Shown as Fed Distorts Stocks Correlation

U.S. government bonds are acting more like equities than any time since before the credit crisis, making Treasuries a hidden risk to investors becalmed by the prospect of the Federal Reserve prolonging stimulus into 2014.

Ten-year Treasuries are moving 0.024 percent for every one-percent change in the Standard & Poor’s 500 Index in the same direction, the first time that’s happened since July 2007, based on a risk measure known as beta. Prior to this month, the gauge averaged minus 0.12 over the past decade, meaning that bonds have historically moved in the opposite direction.