A 5% Ten-Year Triggers More Rate Peak Speculation

For weeks, the buzz in bond circles has been dominated by speculation the U.S. 10-year Treasury would hit 5%.

It finally did just that on Monday—for the first time since 2007—before collapsing by yesterday's close.

Its u-turn lower was forceful, resulting in a key reversal on the daily chart (typically a harbinger of a new downtrend). Coinciding with the move was talk of massive bond shorts unwinding their positions—i.e., buying back bonds and driving down yields.

Such technical trading phenomenon works against the psychology that's been pushing up rates. But the only reason that's relevant here is because it buys the economy more time to slow. Growth deceleration, not short-term trading psychology, is what'll drive rates back down sustainably.

You don't have access to this post on at the moment, but if you upgrade your account you'll be able to see the whole thing, as well as all the other posts in the archive! Subscribing only takes a few seconds and will give you immediate access.

This post is for MLN Pro subscribers only

Subscribe now


Sign in or become a member to read and leave comments.
Just enter your email below to get a log in link.

You've successfully subscribed to
Great! Next, complete checkout for full access to
Welcome back! You've successfully signed in.
Unable to sign you in. Please try again.
Success! Your account is fully activated, you now have access to all content.
Error! Stripe checkout failed.
Success! Your billing info is updated.
Error! Billing info update failed.