On Day Two, Yellen Gets Yawn From Bond Market -- Barron's Blog

        By Amey Stone
        Bond traders hoping for some fireworks from Fed Chair Janet Yellen were disappointed yet again during her second day of Humphrey-Hawkins testimony, this time before the Senate.
        Not only did Yellen stay on point -- the Fed is likely to raise rates this year as long as economic data supports it -- but there was little market reaction.
        The 10-year Treasury closed at 2.35%, essentially even with the prior day's close. The German bund was also unchanged from Wednesday. The yield on the 10-year bund was .78%. A TradeWeb email reporting the data had the pretty straightforward subject line: "U.S. 10-Year Yields Flat Following Yellen Testimony."
        Dyer thinks the Fed is likely to start raising rates later, go slower and end lower than most people expect. He thinks the first rate hike will be in December, followed by three hikes in 2016. He thinks the Fed will start rolling off bonds in its portfolio as they mature six months after liftoff, which could be significant for bond market pricing.
        Rick Rieder, chief investment officer of fundamental fixed income at BlackRock noted "no major surprises" in Yellen's testimony Thursday in a commentary. He continues to think the Fed will raise rates soon and that it should raise rates soon. He writes:
        In our view, the normalization of rates, particularly if combined with well-designed fiscal initiatives, could actually be a benefit to economic growth. Further, keeping rates at excessively low levels, while perhaps beneficial for the financial economy, also raises risks that might threaten to undermine the economic recovery. Consequently, the time for a move away from "emergency rate" levels is at hand.
        (END) Dow Jones Newswires

        July 16, 2015 17:44 ET (21:44 GMT)

#FX
#Forex
#SaleForex
#OnDayTwo
#YellenGetsYawn
#BondMarket
#BarronsBlog