Many bond market participants believe the Federal Reserve does not want the 10-year Treasury notes to yield more than 3%. While the central bankers have never publicly said anything about keeping the yield below 3%, their actions as their two-day meeting ends today may indicate their intent. "This disconnect between the Fed and the market on this point suggests that the potential exists for sharp rate movements if this level is breached without a reaction from the Fed," Banc of America Securities-Merrill Lynch economist Drew Matus said in a note.

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