10-year Treasury yields dropped last week from 4.93% on Halloween to 4.58% today as Treasury slowed its pace of new issues and as jobs data was revised downward. However, at some point Treasury is going to rollover a bunch of short-term debt to finance Government operations (as well as longer maturity issues that are due … Continue reading Don’t Get Too Comfortable With The Pullback In the 10-Year Treasury Yield. It Is Going Higher.
Tag: Treasury yields
The Fed Has Already Lost Control Of The Long End Of The Yield Curve The Fed's monetary policy has been wrong since it kicked off QE in 2009. If the Fed holds rates steady on Wednesday, and if CPI continues to grow sequentially at a rate similar to August and September, then it is likely … Continue reading Will The Fed Hike On Wednesday? Who Cares?
The 10 Year Treasury's real yield is too low given this dovish Fed. If you believe CPI as an inflation measure, you're at a 4.1% Core inflation rate. That figure could go higher, particularly if the Fed is done with rate hikes and continues with its muted QT program.Meanwhile, the 10 Year Treasury yields 4.95% … Continue reading Real Yield and The 10 Year
The 10-year Treasury yield will break 5% next week and will likely sit above 5% at week's end. Fed Funds rate: The Fed will be forced to lower its Fed Funds rate next year so that the interest expense on the $33.6 Trillion National debt does not get completely out of control. My sense is … Continue reading The Treasury Yield Curve Will Right Size in 2024
It will take years to wash away the fiscal and monetary excess of 2020-2022 - a period of unprecedented growth in the money supply. This period was the cherry on top of a decade-plus of Quantitative Easing which got investors hooked on cheap debt and the Fed put. Investor psychology won't change overnight. Investors are … Continue reading A Climbing 10-Year Treasury Yield Will Eventually Crack The Market
There is a lot of dovish rhetoric coming out of the Fed. If the central bank decides to hold rates flat from here and is done hiking at a time when prices for goods and services continue to rise, the market will step in and do the Fed's job for it. Investors will dump longer-term … Continue reading A 6-8% 10-Year Yield Is Possible If The Fed Loses Control
Back in August when we wrote about a 5% yield on the 10-year Treasury we used the old historical Fed Funds Rate to 10-year spread methodology to arrive at a 4.50% long-term yield for the 10-year. If fixed income investors ever really start to give the U.S.'s ability to pay its debt more thought, the … Continue reading A 5% Yield Feels Low On The 10-Year
The 5-year Treasury yield is 4.62% and the 10-year Treasury yield is 4.56%. Yellen has flooded the market with new Treasury issues in order to replenish the TGA that she drew down from $1.7 Trillion in January 2021 to only $44 billion by June 2023. These new Treasury issues push yields higher. Once this forthcoming … Continue reading Treasury Yields Could Go Higher
If you look at what's happening with Treasury yields on the 2yr, 3yr, 5yr, 7yr, 10yr, 20yr and 30yr bonds it implies that fixed income investors believe that the Fed is not taking rates back to zero. The 10 year Treasury bond yield still looks too low relative to the 5yr, 7yr and 20yr (I'd … Continue reading Treasury Yields Imply Rates Will Stay Higher For Longer
$318 Billion of new Treasury securities will be auctioned on August 28th and 29th. These auctions include $191 Billion of T-Bills and $127 Billion of T-Notes. All six tranches are featured in our table below. New supply obviously is a drag on price which pushes yields higher, temporarily or otherwise. Lots more Treasury auctions are … Continue reading Upcoming Treasury Auctions Could Push Yields Higher