Deutsche Bank Sees Volatility Ahead for the Bond Market
- Market disconnect from Fed's rate path may fuel volatility
- Traders wager on two rate increases next year; Fed sees four
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Enjoy the holiday slowdown, bond traders. If analysts at Deutsche Bank AG are right, the market is going to get a lot more volatile.
After the Federal Reserve succeeded in nudging borrowing costs up from near zero last week in its first interest-rate increase since 2006, Treasury yields have hardly moved. Now, traders are betting low inflation and slow global growth will encourage policy makers to raise rates slowly in 2016.