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The yield on the 10-year Treasury note is now at 3.06%, its lowest of the year, well below its 200-day moving average and starting to worry the psychologically important 3% level, which it hasn’t broken since last December.
It will not break that level any time soon, however, Pimco chieftain Bill Gross declared to Bloomberg TV today. He once again stood by his call that bond yields will rise once the Fed stops buying bonds under its QE2 program in June, a call he has been making since early March, while watching bond yields march steadily lower.
Just two days ago, Mr. Gross said yields “may or may not” rise, which at first blush looked like an attempt to back slowly and quietly away from a position that has looked way too early, if not just plain wrong. It looks now like that was just a rhetorical flourish; he still thinks yields will rise.
What he’s still not being crystal clear about is Pimco’s position on Treasurys. As Zero Hedge points out, Bloomberg’s Tom Keene tried to pin him down on whether the bond fund was short Treasurys, and Gross didn’t really answer the question. He has been throwing up some smoke screens about whether the firm is really short Treasurys, for which many, including Zero Hedge, have taken him to task.
But lest you think this early/bad call has Mr. Gross crying himself to sleep at night on his pillow made of dollar bills and angel hairs, well, he is not — “We’re having a good year,” he told Bloomberg.
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MarketBeat looks under the hood of Wall Street each day, finding market-moving news, analyzing trends and highlighting noteworthy commentary from the best blogs and research. MarketBeat is updated frequently throughout the day, helping investors stay on top of what's happening in the markets. The Wall Street Journal's Chief Markets Commentator Dave Kansas and MarketBeat lead writer Matt Phillips spearhead the MarketBeat team, with contributions from other Journal reporters and editors. Have a comment? Write to marketbeat@wsj.com or write Dave at dave.kansas@wsj.com or Matt at matt.phillips@wsj.com.
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