Auction Hints at Market’s Reaction to Impending Taper

Bond prices rebounded today from Tuesday’s losses as dealers bought Treasuries to exit hedges linked to Verizon’s record setting bond deal. The 10 year note auction was strong, and settled today at 2.90%. 10 year Treasury rates seem to be settling in the 2.90-3.0% range. “While it’s unclear what the Fed will do next week, tapering should not spook the market”, said Jake Lowery, Portfolio Manager at ING-US Investment Management.