It's almost as if bond traders and economists are watching different versions of Janet Yellen's testimony to Congress this week.

Traders are taking the Federal Reserve chair's comments over the past two days—that the labor market market isn't fully healed and inflation is too low—as confirmation that the Fed is very unlikely to raise interest rates in the first half of the year. Economists, including UBS Group AG's Drew Matus and JPMorgan Chase & Co.'s Michael Feroli, saw in her message reasons to reaffirm their calls for the first increase to come by June.

But there's a third view about how Yellen's testimony applies to the bond market, as expressed by Jim Bianco, the founder of Bianco Research LLC in Chicago: It doesn't really matter.

In his alternative scenario, “everybody's right,” Bianco said, in that the Fed could start raising its benchmark rate from near zero, like economists predict, and yields remain low, like traders seem to be anticipating.

With almost US$2 trillion of sovereign debt in Europe offering negative yields, demand for U.S. fixed-income assets is unlikely to evaporate, regardless of what the Fed does. That demand—coming in part from overseas—will ensure that bond prices remain high and yields low.

Yields on 10-year Treasuries have dropped to 1.99 percent from as high as 2.14 percent earlier this month, while rates on 2-year Treasuries are 0.61 percent, down from a high of 0.66 percent this month. Analysts surveyed by Bloomberg expect 10-year Treasury yields to rise to 2.2 percent by June. But that would only take them back to the levels they were at in December.

So in the end, so what if Yellen laid the groundwork for policy makers to remove the phrase “patience” from rates guidance while emphasizing they would still have flexibility as to when they'd move? Maybe the actions of central bankers in Europe and Japan—who are pouring cash into their economies that is seeping into U.S. markets—matter just as much right now as what Yellen does.

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