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Yellen’s Focus on Term Premium Getting Noticed in Bond Market

Investors may want to take a closer look at Janet Yellen’s comments on the risk of surging interest rates to get a better sense of why she is so concerned.

The Federal Reserve chair cited what’s known as the term premium when warning Wednesday that bonds, as well as stocks, are richly valued, sending prices of both tumbling. Problem is, what to read from the gauge of relative value has baffled Fed officials and been ignored by investors in the past.