the 30year treasury bond long overshadowed by its 10year counterpart is turning into something of a sweet spot for longterm investors who are looking for another opportunity to buy the long bond from the federal reserve’s wednesday afternoon policy update  traders expect fed policy makers to raise rates next year by more than previously thought due to persistent inflation and investors like portfolio manager eric vanraes of eric sturdza investments in geneva are interested in buying more of the 30year bond to reflect their view that the central bank would be committing a policy mistake by tightening too late and too aggressively as growth slows the long bond as with all treasurys is traditionally seen as a haven  “for many people like me the 30year bond is the sweet spot” vanraes said in a phone interview “inflation is not an issue for this maturity and it’s a lesscrowded trade than the 10year note”  vanraes’ assetmanagement firm which oversees 28 billion and many other longterm investors are driven by the firm belief that slowing growth is a bigger problem than inflation right now in addition the reduced availability of the 30year bond in the future is making it more attractive for them to keeping buying it sooner rather than later bond prices and yields move in opposite directions so that the continuing buying of the 30year keeps pushing down its yield a dynamic that’s played a crucial role in the treasury market’s recent volatility wednesday morning’s moves in the us bond market ahead of the fed policy announcement reflected that dynamic with the 30year yield tmubmusd30y falling to around 195 while the 5year note yield tmubmusd05y rose on ratehike expectations flattening the treasury curve in a worrisome sign of potential economic trouble parts of the curve are already inverting with the 20year yield rising above the 30year rate for example meanwhile dow industrials djia  the sp 500 spx  and nasdaq composite indexes comp struggled for direction ahead of the release of the fed’s policy statement at 2 pm eastern time and powell’s news conference at 230 pm stocks have rallied ahead of the fed announcement however brushing off the curve flattening all three indexes closed at records on tuesday for a third consecutive session on wednesday the fed is expected to lay out its plan to begin scaling back monthly asset purchases investors will be focused on how the central bank’s policy statement characterizes inflationary pressures and economic growth as well as whether powell pushes back against rising ratehike expectations and stresses the need for flexibility with the central bank’s policies read 5 things to watch for when fed meets wednesday  the risk for powell is that he inadvertently extends the treasury market’s recent volatility by telegraphing a readiness to either taper or hike rates faster than many anticipated or at the very least lets investors draw their own inferences  strategists at bmo capital markets and standard chartered bank along with a team at bofa are among those who have flagged the possibility that powell’s remarks will be interpreted in such a way that leads to the continued flattening of the curve tom garretson of rbc wealth management said there’s even a risk in what powell doesn’t say such as if the fed chairman fails to sufficiently “divorce” the tapering timeline from the ratehike timeline  vanraes said he’s been buying the 30year bond ever since powell’s jackson hole speech in august and is standing by to purchase more on wednesday as well as in 2022 if the yield gets down to 15 or 125 next year that’s because he sees a lack of growth as a bigger problem than inflation which should “decelerate at some point because you can’t have much inflation without much growth”  his view is that the fed should delay the start of tapering until december and then remain in a waitandsee mode on rate hikes meanwhile he says “the long end is an investment opportunity so we are already preparing for 2022 each time there’s weakness in the 30year rate we buy more of the 30year because it’s less dangerous than the 10year which is too volatile and driven by hedge funds”  read hedge funds seen facing heavy losses amid wrongway treasury bets ahead of fed tapering traders say