Bond investors responded to Federal Reserve Chair Janet Yellen’s warnings this week of debt-market complacency by taking on more risk.
Investors in exchange-traded funds that buy junk bonds are shifting into shorter-maturity debt that’s less vulnerable to the Federal Reserve’s withdrawal of stimulus measures.
MF Global Holdings Ltd. took the cult of the Wall Street chief executive officer to a new level with its sale of bonds that pay a higher rate if Chairman and CEO Jon Corzine quits to take a job from the U.S. president.
Treasury five-year notes extended the longest losing streak this year as traders bet improving economic data will push the Federal Reserve to raise rates as early as July 2015.
"This is a starting-gun problem."
- William Larkin on Aug 22, 2014