Traders Wrestle Control of the Bond Market Back from the Fed

It’s hard to believe that it was only one month ago that the Federal Reserve decided to take over the bond market from the always skeptical traders by trotting numerous governors all with the same unequivocal message: There is the chance of an interest-rate increase at every policy meeting.

There was no room for interpretation. Not only would the Fed hike rates in March, but policy makers really meant it this time when they said bond traders should brace for three increases before the year was out. Bonds sold off as it became clear that the Fed would finally start leading the market instead of following it.