Pretend To Be Surprised: Treasuries Are Lower After The Debt Deal

Totally obvious, but totally counterintuitive to so many people…

Treasury prices are lower, and yields are higher after the debt deal.

The fact is, at no point did anyone think there was much credit risk anywhere across the curve, and so US bonds always did their normal thing: Trade up during times of panic (last Friday’s move was intense).

Now the panic is subsiding (a little) and yields are wider.

Here’s the latest curve via Bloomberg. Now the green line is slightly higher than orange.

chart

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