US 10-year Treasury yields risk hitting 6% for first time since 2000, Pimco says
Bond giant’s investment chief warns that further sharp rise in borrowing costs is ‘feasible’ as market participants are forced to unwind losing bets
Source: Financial Times
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DW NOTE
Pimco is warning that 10-year yields could hit 6% — not because of growth or inflation data, but because forced position unwinding is dragging the market there. That's the signature of a liquidity problem, not a policy problem. The Fed raised rates to 3.75-4.00% in September with inflation at 3.4% and the deficit running $1.4 trillion through June. Meanwhile yields have climbed to 5.27% and are still rising. When the market prices risk higher than the central bank does, it's the market that's right.