Bond market playing a risky game over Fed rate rise bets

New York

IF the Federal Reserve is really so intent on raising interest rates this year, why is Wall Street chopping its forecasts for bond yields?

For all the hand-wringing over the recent selloff that wiped out about US$1.2 trillion in value from the global bond market, the fixed-income market's best and brightest have actually taken down their year-end estimates for Treasuries in four of the past five months.

It amounts to a dangerous game of chicken, in which many analysts and investors are betting the Fed won't lift rates too fast because of t…