Despite many here, including me, hold a very negative view on USD and U.S. equities, the treasury market has improved. It had a pretty good auction today, and 10y yield dropped back to 4.27%. It is still high, but much better than 4.6%.
What is your speculation why USD keeps going down, but yield is lower? Traditionally we feel the bond market is smarter since it is way larger. Do bondholders see something we don’t? Or there is just no alternative market to absorb the fund?