To protect themselves against such a possibility, investors rush to compensate by adding duration to their holdings, in a phenomenon known as convexity hedging. The impact of convexity hedging can be...

To protect themselves against such a possibility, investors rush to compensate by adding duration to their holdings, in a phenomenon known as convexity hedging. The impact of convexity hedging can be so large that it can actually exacerbate yields in the whole Treasury market.