Treasuries Fall on Speculation of Mortgage-Related Hedge Sales

Dealers from Deutsche Bank AG to Barclays Plc said the risk of that happening was reduced by the fact the Fed currently has $1.2 trillion of mortgage-backed securities in its stockpile, making it the biggest holder of the securities. The actual convexity hedging flows will be less when rates rise this time than it was in the past, said Dominic Konstam, global head of interest-rates research at Deutsche Bank. The hedging was massive in 2003, and we wont see a repeat of that. For the original version including any supplementary images or video, visit http://www.businessweek.com/news/2013-06-10/treasury-yield-is-near-14-month-high-before-note-bond-auctions