The bond market has spent weeks behaving like the biggest threat to stocks. Now, the policy response could be creating the next leg higher for equities.
The U.S. Treasury doubled the size of its long-dated bond buybacks on Aug. 19, and for a few hours it worked.
By Friday, the 30-year Treasury bond yield had erased the entire decline and settled at 5.24%, back within a few basis points of the 19-year high it hit earlier that week.
Most of Wall Street read that round trip as a failure.
Chen Zhao, chief global strategist at Alpine Macro, reads it as beside the point.
