Yield Curve Control Bets Are Becoming More Obvious in Treasuries
- Huge build-up of positions in 5-, 10-year bond futures
- Five-year yields drop to record low before June Fed minutes
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Bets that the Federal Reserve will implement yield-curve control are showing up in positioning data and the curve itself.
The evidence is all over the belly of the Treasury curve, with yields on five-year notes falling to a record low Tuesday. Open interest in five and 10-year futures -- a tally of outstanding positions -- has surged in the past week, reaching a level equivalent to $36 billion in cash bonds.