Bond Traders Have Gone From Hoping for Volatility to Worrying About It
- As stocks tumble again, yields remain near a four-year high
- Markets can’t bank on Fed backstop as Powell takes the reins
This article is for subscribers only.
For bond traders, the days of begging for more volatility may be over. Now they’re fretting about just how grisly the selloff can get.
Benchmark 10-year Treasury yields held their ground on Thursday, remaining close to the highest level since 2014, even as stocks plunged to their lowest levels in two months. While the Cboe Volatility Index, known as the VIX, is below its recent peak, its bond-market cousin, the 10-year U.S. Treasury Note Volatility Index, is soaring. It’s now the highest since April on a closing basis after the steepest one-day increase in two years.