I think we are approaching a short-term peak in Treasury yields.
The 10-year pushed through 5%, tested levels we have not seen in years, and the market is getting pretty frothy around that big psychological number.
Could we be building a double top up here this past week testing the highs from 2023?
We can all hope, right?
My longer-term view there is still the potential that the 10-year could ultimately trade toward 5.20% or potentially higher as this cycle develops. There are so many risk factors. I pray that we do not see that.
Short term, I think the next move could be LOWER.
With the Iran war, oil shock and extreme volatility, predicting the exact path is anyone’s guess. But tactically, I think we may be setting up for a couple months of reprieve.
My range to watch is 4.75%–4.85% on the 10-year.
If we get there, THEN we reassess whether the economy and markets can settle into something resembling a soft landing after this spike above 5%.
Stocks are getting a BIG bounce this morning after I said yesterday that I thought we could see exactly that following the Fed hike. Lower oil and easing long-term yields are helping that move this morning.
Stay sharp!
US10YR 🔻 4.94
