Tax-Cut Deal Results in Turmoil for Bonds By Mark Gongloff and Tom Lauricella Wall Street Journal
“The tax deal in Washington led investors to dump government bonds on Tuesday, with yields on Treasurys hitting their highest level in six months… “The tax compromise will keep the economy on track, but there’s the question of how we’re going to pay for this,” said George Goncalves, head of U.S. rates strategy at Nomura Securities International, who has been bearish on Treasurys since mid-October. “It will require more Treasury borrowing.”… One fear among bond investors is that foreign central banks may also be backing away from Treasurys. William O’Donnell, head of U.S. Treasury strategy at RBS, said that foreign central banks have abruptly pared down the amount of Treasurys they are parking with the Fed for safe keeping in recent weeks.”