DURING the turmoil in global markets on Wednesday last week, something happened that bond traders will not soon forget.
Soon after 9am, the yield on one of the world's most-traded bonds, the 10-year Treasury, went into a bizarre free fall. This particular Treasury note is tracked obsessively by Wall Street and is a reference for other interest rates across the wider economy. Investors see it as a safe haven in times of stress.
On Wednesday morning, stock markets in Europe were sliding, and fears about the strength of the global economy were building. After the Treasury market opened, the yield on the 10-year Treasury, which moves in the opposite direction of its price, plunged far below the 2.2...
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