U.S. government bond markets have stayed relatively benign in recent weeks, proving that fears of taper-induced volatility were unfounded and analysts told CNBC the Federal Reserve should be pleased with the recent moves.
All eyes are on Fed chair Janet Yellen’s first testimony before Congress on Tuesday, as investors attempt to predict whether the well-known dovish economist will continue tapering at $10 billion a month or pause following a string of weaker-than-expected data.
Simon Warner, head of fixed income at AMP Capital, told CNBC Asia’s Squawk Box on Monday the recent behavior of the U.S. government bond market will give Yellen an extra spring in her step.
“The lack of inflationary pressure is keeping a lid on the long end of the bond market along with some of these concerns we have around the world. So I would have thought the Fed would be delighted about the way the bond market has traded since their move in December,” he said.
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