BlackRock [profile] bought Treasury bonds and high-grade mortgage backed securities in recent weeks, the Wall Street Journal's Min Zeng writes, in an effort to met on prices stabilizing after the end of Summer's Fed candidacy.

BlackRock has the expectation that bond yields will rise in 2014, but is choosing to make short-term bets that Fed isn't eager to move the process along so quickly, Zeng writes. Zeng reports that Rick Reider, co-head of Americas, did not specify how much BlackRock bought but said he could buy again if the 10-year yield moves further to 3 percent in the short term.

"The Fed signaled strongly that it is concerned about the impact of rising mortgage rates on the housing markets, so if the 10-year yield rises closer to 3 percent, it may push mortgage rates closer to 5 percent, and hamper the housing recovery," Zeng quoted Reider as saying.

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Edited by: Casey Quinlan


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