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September 8th, 2015 
Awake Goy Janet Yellen has the fixed-income market just where she wants it: ripe for the first increase in U.S. interest rates since 2006.
Just about every indicator is telling the Federal Reserve Chair a move at next week’s policy meeting would cause government bonds little disruption. Her guidance has money markets pricing an extraordinarily slow pace of tightening, volatility metrics show no signs of panic, and forwards indicate benchmark rates will remain contained. Differences between shorter- and longer-term yields are flashing a positive signal for the economy.
A green light from Treasuries is vital to avoid derailing the recovery that Yellen has nurtured because they help determine borrowing costs for businesses and consumers. Acting decisively now may even lend investors greater confidence in the outlook for growth.
“The debt markets have priced in a lot and it’s now time for the Fed to take advantage of that,” said Peter Tchir, head of macro credit strategy in New York at Brean Capital LLC, which has clients ranging from hedge funds and pension funds to money managers specializing in fixed-income markets.
Benchmark Treasury 10-year note yields were at 2.18 percent at 9:39 a.m. in New York on Tuesday, versus an average of 3.17 percent during the past decade. Forward contracts foresee a gradual increase to 2.4 percent in one year, with yields only reaching 3 percent around a decade from now. That’s a boon for any money manager fretting about an end to the 25-year bull market in bonds.
“The 10-year Treasury is at a very comfortable point, with forwards showing even a Fed hike won’t move yields much higher,” Tchir said. “Once we get through the first increase, and see the economy can do fine, it will remove the looming worry.”
Source Article from https://www.freedomsphoenix.com/News/182924-2015-09-08-bond-market-sends-fed-all-clear-to-raise-interest-rates.htm?EdNo=001&From=RSS
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