Note on the Bonds

There seems to be a growing line of thought that the Fed may go with a rate hike this month. Traders are apparently looking at these various Fed governors’ speeches and coming to a conclusion that they are trying to prep the markets for a rate increase.
Boston Fed Governor Rosengren commented this AM about the risk of waiting too long to hike rates. He had tightening labor markets in mind. Then we had an announcement that another Fed governor, Ms. Brainard is set to deliver a speech late Monday afternoon. Since she has been a fairly vocal dove, traders are speculating that she might change her tune somewhat.
Also, Dow Jones is citing an upcoming 3-year and 10-year Treasury note auction scheduled for Monday which is due to be finished up shortly before Brainard gives her speech.
In yesterday’s comments on the bonds I noted that perhaps Draghi’s comments yesterday were also instrumental in the bond selloff. The line of thinking is that the Central Banks are perhaps reaching the end of monetary policy limits.

This post was published at Trader Dan on September 9, 2016,.