No worries.
From Wolf Street, August 16:
“Higher for longer be damned”: consumers and businesses.
The 10-year yield closed at 4.28% today, according to Treasury Department data, the highest since, well, let’s look here, November 14, 2007, so about 15 years ago, having edged past November 2022 and June 2008 by a hair. 2007 is notable in that it was the last year before the arrival of QE.
What is hilarious in a twisted way is that the 10-year yield had dropped to 0.5% in August 2020, and everyone and their dog were preaching to the world that longer-term yields would drop into the negative in the US, as they’d already done in Europe, because of course the 40-year Great Bond Bull Market – Great Bong Bull Market? – would have to continue for evermore, with yields falling deeper and deeper into the negative. I have a term for this: Consensual Hallucination.
The entire sucker-rally from November last year through May this year has now been mopped up.
So it has been quite a trip, from the all-time low in August 2020 via raging inflation to the 15-year high. And every step along the way, the longer end of the Treasury market has been in denial.
But gradually the market is grappling with the notion of coming out of denial. The thing is, in normal times a 10-year Treasury yield of 4.28% would be low, when short-term yields are 5.5%, with inflation and the uncertainty of inflation bouncing all over the place. Eventually investors would want to be compensated for inflation, no?....
....MUCH MORE
Since this piece was posted (Wednesday) the TNX (treasury yield futures) got to 4.3220% yesterday afternoon before backing off to 4.2650% a few minutes ago.
