[Wells Fargo exits long U.S. 10-year Treasury Inflation-Protected Securities trading strategy] As the yield on U.S. 10-year Treasury Inflation-Protected Securities (TIPS) rose above 2.15%, Wells Fargo strategists withdrew from their August 21 recommendation on Monday. It recommends buying 10-year TIPS at an actual yield of 2%, with a target yield of 1.7% in the next two to three months and a stop loss of 2.15%. Since the Federal Reserve signaled on September 20 that interest rates may remain high well into next year, both real and nominal Treasury yields have risen. The broader recommendation to go long U.S. bonds “is predicated on the Fed signaling an end to rate hikes soon, which was not the message the Fed sent last week,” Angelo Manolatos and Mike Schumacher said in a note.
U.S. Treasury Secretary Yellen: The bond market’s expectations of the Fed’s actions can be