When you get an instantaneous 7bp rally in 10yr yields following an FOMC communication, only to immediately bounce on the preexisting trendline and continue in the same direction as before, you know that bonds aren't paying the normal level of attention to the Fed.  That's nothing new, but it was more than fair to wonder about it yesterday afternoon. 

Today cleared up any doubts.  It's all about Europe, and the thesis is the same as it has been.  We're waiting on European bond markets to commit to a direction after having flat-lined in February.  For some market participants, that flat-line is terrifying.  They're worried it means that European bonds are getting ready to bounce higher as soon as Greece is cleared up.  And considering that US bonds are where they are because of the massive, ongoing European strength, US bond traders are more terrified still. 

In other words, and to reiterate the caveat I offered with much of 2014's uncanny rally: when Europe finally turns the corner, the party is over.  The 2nd part of that caveat is that we won't really know when Europe turns the corner without the benefit of hindsight.  Some of the "freaking out" that's going on in US bond markets is due to the fact that February is currently still eligible to be the scene of the bounce.  So we watch closely and wait patiently for Europe to make a move, understanding that things are tense in the meantime.  Trading levels reflect this nervous anticipation perfectly.