Bond Market's Recession Risk Overplayed

The bond market's violent repricing in March, which saw two-year Treasury yields slide a percentage point over three days, has left traders questioning whether it was a recessionary false alarm. While stocks and credit markets absorbed the events with relative ease, the gap in market reactions continues to border on the historic. The debate over the divide between bonds and other markets is far from settled, with some suggesting that bearish positioning among speculators made the big drop in yields a false alarm.