Wall St Week Ahead: Epic Treasury rally may be running out of fuel

Some investors believe much of the dovish shift from the Fed may already be reflected in Treasury prices. — Reuters

NEW YORK: A surge in US government bonds has helped lift stocks and heightened investors’ appetite for risk. Now some are betting that further gains may be harder to come by unless the economy severely weakens, potentially upsetting the narrative of resilient growth that has propelled markets.

An unexpected dovish pivot from the Federal Reserve earlier this week turbocharged the rally in Treasuries, sending benchmark 10-year yields to their lowest level since July. Yields, which move inversely to bond prices, now stand at 3.93%, some 110 basis points from a 16-year high hit in October.