In the current high inflation environment we are in and with the Rus-Ukr war pushing energy and other commodity prices higher and higher, we can all agree yields on bonds have every right to move way higher then we have been seeing the past few years.
The peak of the 'Tamper-Tantrums' back in November 2018 (Seen with black arrow) we can see the 10 year yield was higher than current levels. This was also when the fed wasn't that eager to release a 9 trillion dollar balance sheet back to market and when inflation levels were no where near what we are seeing (and feeling...) today.
I do think we could be seeing the 10Y yield trying those levels (hit a little over 3% during those times) in the upcoming weeks. I do think the market will be ahead of the Fed, and push it to move higher faster. We may even break the 3% level.. especially if there is a hyper-inflation panic.
Faster Bond movements could drag the market down (especially high flyers, tech stocks, etc) as e have seen in the recent past.
We had a 2y/10y inversion last week which could be a leading recession indicator. In any case, be sure it's the Bond markets that will be setting the tone.
Trade with caution :)
The peak of the 'Tamper-Tantrums' back in November 2018 (Seen with black arrow) we can see the 10 year yield was higher than current levels. This was also when the fed wasn't that eager to release a 9 trillion dollar balance sheet back to market and when inflation levels were no where near what we are seeing (and feeling...) today.
I do think we could be seeing the 10Y yield trying those levels (hit a little over 3% during those times) in the upcoming weeks. I do think the market will be ahead of the Fed, and push it to move higher faster. We may even break the 3% level.. especially if there is a hyper-inflation panic.
Faster Bond movements could drag the market down (especially high flyers, tech stocks, etc) as e have seen in the recent past.
We had a 2y/10y inversion last week which could be a leading recession indicator. In any case, be sure it's the Bond markets that will be setting the tone.
Trade with caution :)