• 17 hours Is This The World’s First Truly Democratic Stock Exchange?
  • 20 hours India’s Wealthiest Set To Hold $23 Trillion By 2028
  • 23 hours First Quarter Profits Slip For World's Top Oil Companies
  • 1 day The Yuan May Be China's Biggest Weakness
  • 2 days Hedge Funds Having A Banner Year
  • 2 days Disney Heiress Asks “Is There Such A Thing As Too Much?”
  • 2 days BHP Turns Bullish On EVs
  • 2 days Investors Turn Bullish On America’s Nuclear Decommissioning Business
  • 3 days The $90M Inflatable Rabbit Redefining Modern Art
  • 3 days Huawei’s Fate In The Air
  • 3 days Tesla Slashes Prices Again
  • 3 days The Modern History Of Financial Entropy
  • 4 days Italy’s Central Bank Embraces Sustainable Investing
  • 4 days Trump Lifts Metals Tariffs To Cool Simmering Trade War
  • 4 days Researchers Push To Limit Space Mining
  • 4 days Could China Start Dumping U.S. Treasury Bonds?
  • 5 days Is Winter Coming For HBO?
  • 5 days Rise Of EVs Signals Peak Gasoline
  • 6 days Jeff Bezos Doubles Down On Space Colonization Ambitions
  • 6 days Gold Mining Stocks Stuck In Limbo
How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

Marty Chenard

Marty Chenard

Marty Chenard is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools and stock market models. As a result, he…

Contact Author

  1. Home
  2. Markets
  3. Other

A Dangerous Bond Bubble

As reported two weeks ago: spreads had been sending a caution sign for the risk of yields rising. That has been happening, and the 30 year yields are rising ...

It was June 2008 when the 30 yields had hit its last peak level before dropping. From there, it down trended until it hit a low not seen in well over a decade.

That low was made in December of last year. Since then, the 30 year yields have been rising ... this was not just a rise, it was a rise that penetrated a 10 month Resistance line.

Why is this important?

Because the Fed has a mission to keep 30 year mortgage rates below 4.5% in an effort to give the housing industry a chance to recover.

With the 30 year yields moving above this long term resistance, the markets are saying that risks levels and the threat of inflation demand higher yields.

The Fed is saying, "no, we want the yields to stay low".

The Fed has already spent over $100 billion in purchasing Treasuries in an effort to keep rates down.

Just as the yields are now breaking through a long term resistance, the Fed is going into battle and is expected to buy another $300 billion in bonds over the next 6 months in a continuing effort to force mortgage rates lower.

So, rather than normal market forces interacting with each other, we have the overt manipulation of Fed interference.

It is a zero sum game in the end for the Fed because they will cause a bubble in bond prices that will have an ugly ending.

Pete Seeger's song lyrics had it right ... When will they ever learn?


Back to homepage

Leave a comment

Leave a comment