• 341 days Will The ECB Continue To Hike Rates?
  • 341 days Forbes: Aramco Remains Largest Company In The Middle East
  • 343 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 743 days Could Crypto Overtake Traditional Investment?
  • 748 days Americans Still Quitting Jobs At Record Pace
  • 750 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 753 days Is The Dollar Too Strong?
  • 753 days Big Tech Disappoints Investors on Earnings Calls
  • 754 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 756 days China Is Quietly Trying To Distance Itself From Russia
  • 756 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 760 days Crypto Investors Won Big In 2021
  • 760 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 761 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 763 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 764 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 767 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 768 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 768 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 770 days Are NFTs About To Take Over Gaming?
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

  1. Home
  2. Markets
  3. Other

US Treasury Bull Market Over?

In the wake of amusing calls by various Fed presidents about impending rate hikes, Curve Watchers Anonymous has received numerous questions about the US treasury bull market.

Specifically, readers want to know "Is the bull market over?"

From my perspective, the bull market is not over if yields on the long-end of the curve (10 and 30 year duration) make new lows. So, how likely is that?


Yield Curve 2001-Present

US Yield Curve Monthly Charts
Larger Image


Treasury Bear Proclamations

For going on two decades, US treasury bears have called US treasuries "certificates of confiscation".

Treasury bulls laughed all the way to the bank.

There were some steep selloffs in 2003, 2009, and 2012 leading bears to proclaim the end of the bull. 2015 proved the 2012 proclamation was wrong.

Undaunted, the bears simply proclaimed 2015 the end of the bull market.

Then, with a parade of Fed presidents touting rate hikes for over a year, and with more economists piling on those forecasts, the bears were sure they were finally right.

"Victory at Last!", thought the bears. But here we are, flirting with new record-low yields on both the 10-year note and the 30-year bond.

And if the economy is sliding into recession (or already in one), or even if the economy simply stalls, the treasury bears will be proven wrong once again.


Yield Curve Flattens

On Friday, in response to a horrific jobs report, yield on the 30-year long bond fell 12 basis points to 2.52% and the odds of a rate hike this year shifted from July to December.

Note the action at the long end of the curve (blue arrows). The trend has been distinctly lower despite all the Fed hawk-talk.

The flattening of the yield curve (short end rising while long end sinks) is not favorable for bank profits or increased bank lending.


Related Articles

  1. Horrendous Jobs Report: Fed Hiking Not: Payroll Jobs +38K, Employed +26K, Labor Force -458K, Revisions -59K
  2. Four GDP Estimates: New York Fed Nowcast Up to 2.4% (I'll Take "The Under"); Modeling Error on Unemployment Rate?
  3. Construction Questions: Construction Employment Declines Back-to-Back First Time Since May 2012; Questions of the Day
  4. No Hikes for Years?! Rate Hike Odds Collapse; Fed's Evans Discusses "Delays for Years"

Mish Yield Curve Tweet

 

Back to homepage

Leave a comment

Leave a comment