Treasuries Rout Accelerates as Quants Add to Selling Pressure
- Market frets over risk of higher inflation, possible Fed taper
- Corporate, mortgage-related hedging seen magnifying the losses
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Treasuries tumbled anew, lifting 30-year yields the most in almost two months, as corporate hedging and trend-following quant funds added fuel to the selloff that’s driven global debt to its worst annual start in years.
Rates climbed across notes and bonds, with the long-end rising most and the curve steepening sharply, fueled by block sales in Treasury futures and possible mortgage-related hedging. Before buying interest emerged to pull yields back down, the 30-year yield jumped by 11 basis points at one point, to 2.29%, while the 10-year rate climbed as much as 9 basis points to 1.43%, both roughly one-year highs. Rates in Europe jumped too.