U.S. bonds sold off on Wednesday — and that may have been the point.
Markets took a hit following a Bloomberg News report that cited unnamed sources as saying that officials in Beijing have recommended China, the largest holder of U.S. Treasurys, to slow or even halt its purchases of that debt.
U.S. stocks on Wednesday snapped a six-day winning streak, and Treasury yields, already in an upswing, moved higher with the 10-year reaching 2.597 percent, their highest level since March 15. Bond yields rise when bond prices fall.
China's foreign exchange regulator publicly refuted the Bloomberg report on Thursday, saying it cited "false information." But the jolt to markets may have been designed as a warning to Washington, which is clashing with China over trade and other issues.