Can’t Blame the Fed for Treasury Selloff Keyed by Rout in Europe
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The last time Treasuries fell this much in a week, a blowout jobs report had traders speculating the Federal Reserve would raise interest rates in September. This time, traders’ expectations barely budged.
Instead, the worst week for Treasuries in two months was triggered by a broad exit of investors from some of the most popular bets of this year. It started with a dive in European sovereign debt, which dimmed the allure of relatively higher U.S. yields, and continued with drops by the U.S. dollar and global stocks, all of which have gained on the year.