BofA Sees Bond Traders Making Big Mistake in Underestimating Fed
The Marriner S. Eccles Federal Reserve building stands in Washington, D.C., U.S., on Tuesday, Jan. 27, 2015. The policy-setting Federal Open Market Committee (FOMC), meeting for the first time in 2015 on Tuesday and Wednesday in Washington, will be challenged by reports contrasting the encouraging performance of the U.S. economy with a global outlook that has darkened since they met in December.
Andrew Harrer/BloombergThis article is for subscribers only.
Bank of America Corp. analyst Hans Mikkelsen says bond traders are too comfortable with the idea that borrowing costs will stay low for years to come.
He argues the market is underestimating the Federal Reserve’s desire for higher long-term borrowing costs -- and its ability to make that happen.