Brian Chappatta, Columnist

Bonds Flash a Warning Sign to the Fed

Behind elevated U.S. yields, traders are losing confidence in accelerating inflation.

October 23, 2018 at 1:55 PM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

In a “flight to safety,” this is what safety looks like.
Photographer: Mandel Ngan/AFP, via Getty Images

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The Treasury market did exactly what’s expected during a global stock-market rout: It staged a strong rally. The U.S. 10-year yield plunged 7 basis points, the most in almost five months, as investors flocked to havens.

Yet when looking at a 2018 chart of the global borrowing benchmark, the move barely seems to register. At 3.13 percent, the yield is still firmly above where it started the month, and it isn’t anywhere close to the moving averages that technical strategists love to watch for a crucial reversal. For shorter-dated maturities, the move seems even less pronounced.