Henderson's Pattullo: 50/50 chance of Fed abandoning taper plans

The heavy sell-off in the US treasury market over the past two months could force the Fed to postpone its plans to begin reducing its asset purchase programme, according to Henderson's John Pattullo.

Bond markets have suffered after the Fed indicated it may begin tapering its quantitative easing programme towards the end of 2013, with global bond funds suffering their worst month in 20 years in May and that slump continuing into June. Notably, Pattullo (pictured) said the sell-off, which has seen yields on 10-year paper spiking from 1.66% at the start of May to 2.6% last week, has also weighed on the long end of the mortgage market. He said a potential slowdown in mortgage demand would stunt the US economic recovery, which could lead the Fed to change tack. "The Federal Reserv...