China’s Central Bank Steps Up Rhetoric Against Rally in Long-Dated Government Bonds

(Bloomberg) — The People’s Bank of China (PBOC) ramped up its verbal pushback against the rally in long-term government bonds, warning of a reversal and hinting that a mismatch between market prices and the economic outlook will be corrected.

The central bank is optimistic about China’s long-run growth prospects, and yields “will be within a reasonable range that matches the economic outlook,” the PBOC-backed Financial News reported on Tuesday, citing an interview with an unidentified official in charge of a relevant department at the policymaker. That’s the case despite a temporary deviation between the two that’s been driven by supply and demand, the report added.