Rates: the Fed’s feverishness ignites the bond market

The situation is deteriorating on the global bond markets. The rise in rates, underway since this summer, accelerated this week. They flew on Monday. Since they move in the opposite direction to the bond price, this means that the bonds have plunged. The movement continued on Tuesday. The US bond market is even heading for its worst quarter since 1973, according to Bloomberg.

Will the gradual rise in market rates that accompanied the normalization of monetary policies turn into a meltdown? On Monday, harsher-than-expected remarks from Jerome Powell on US monetary policy set things on fire. The yield on 2-year Treasuries jumped 18 basis points (bps) or 0.18 percentage points, then climbed another 7 bps on Tuesday, to nearly 2.20% . The benchmark US 10-year rate climbed 14 and then 10 basis points in two days, approaching 2.40%.

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