Wall Street whipped by resilient treasuries

Primary dealers hurting after going net short on government debt for the first time since September 2011

BETTING against US government debt this year is turning out to be a fool's errand. Just ask Wall Street's biggest bond dealers. While the losses that their economists predicted have yet to materialise, JPMorgan Chase & Co, Citigroup Inc and the 20 other firms that trade with the Federal Reserve began wagering on a treasuries selloff last month for the first time since 2011. The strategy was upended as Fed chair Janet Yellen signalled that she wasn't in a rush to lift interest rates, two weeks after suggesting the opposite at the bank's March 19 meeting.

The surprising resilience of treasuries has investors re-calibrating forecasts for higher borrowing costs as lacklustre job growth and emerging-market...

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