Temporary Insanity In Bonds
Wall Street hadn't seen anything like it since the bond market bloodbath of two years ago. In only two weeks, prices plunged nearly $50 on each $1,000 bond, driving the yield on the benchmark 30-year U.S. Treasury bond from 6.03% to 6.47%. "We had thought the next general move in interest rates would be up," says Ian A. MacKinnon, who is responsible for the management of $70 billion in fixed-income funds at Vanguard Group. "But we were not prepared for the magnitude or the suddenness of the move."
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