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Thursday, February 2, 2023

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S&P 500 vulnerable to a decline says Joe Friday!

Odds Favor Lower Bond Yields In Months Ahead!

By Chris Kimble

Interest rates have risen rather quickly as the Federal Reserve attempts to fight inflation.

Will the move be a case of too far, too fast?

Today’s long-term “monthly” chart of the 10-year US treasury bond yield seems to think so.

In my humble opinion, the chart below puts the Federal Reserve’s 2.5 year move in perspective… and it seems to be a real outlier of the past 60-years!

As you can see, the 10-year bond yield rallied up to the 23% Fibonacci retracement level of the 1980s high/2020s low (green line). And, while doing so, it recorded a Rate-Of-Change (ROC) that we haven’t seen before: yields are up 560% in 30 months! That is up 400% more than any 30-month period in the past 60 years. Looks like it’s time for a breather…

Time will tell if the Federal Reserve rose interest rates too fast. Stay tuned!

10-Year US Treasury Yield “monthly” Chart

10 year us treasury bond yield peak reversal lower year 2023 investing chart image

 

Note that KimbleCharting is offering a 2 week Free trial to See It Market readers. Just send me an email to services@kimblechartingsolutions.com for details to get set up.

Twitter:  @KimbleCharting

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

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