The conspiratorial-minded traders on Friday noted what seemed to be a coordinated communication strategy from the Fed to tamper down on rate hike expectations. The response was a bid in stocks and bonds. The thinking among that crowd was that something bad was happening in the bond market -- similar to what happened in the UK -- and that the Fed was trying to halt selling.
If that's the case, it only worked for one day as long bond yields rise 12 bps today to a new cycle high at 4.41%.
Other thoughts on what could be going on:
- Sovereign selling in order to raise money to for currency intervention in Japan and elsewhere
- The implosion in Hong Kong assets has people worried about contagion
- Xi's consolidation of power will mean inevitable war in Taiwan and China wants to unload Treasuries before it gets sanctioned like Russia
