The 10-Year U. S. Treasury Yield is testing the ‘ultra low-rate’ bounds again.
A month ago, we noted the significance of the post-election spike in bond yields. Of course, yields have been in a secular decline since topping out in the early 1980’s. However, since 2007, just prior to the financial crisis, yields experienced an acceleration to the downside. This acceleration marked what we considered a new regime for bond yields: an ‘ultra low-rate’ regime. For nearly 10 years, this ultra-low rate regime in the 10-Year U. S. Treasury Yield (TNX) was contained by a Down trendline stemming from the 2007 peak in yields. The post-election move sent the TNX breaking above that trendline. Thus, while yields still remained well within the 30-plus year secular downtrend, the breakout, we surmised, signified the end of the ultra low-rate regime.
This post was published at Zero Hedge on Feb 28, 2017.