10-Year U.S. Treasury Yield: Anticipating the Rising Trend
by Bob Stokes
Updated: June 15, 2022
On June 14, the yield on the 10-year U.S. Treasury note surpassed 3.45% -- its highest level in more than 11 years.
Keep in mind that the lowest intraday reading for the yield on the 10-year note was 0.31% -- and that was as recently as 2020. So the rise has been remarkable.
Our Elliott Wave Financial Forecast was ahead of this trend reversal. Back in March 2020, the publication showed this graph of yields on global bonds, 10-year U.S. Treasury notes and general obligation municipal bonds. Here's the commentary:
According to 150 years' worth of data ... this is the first time that 10-year Treasury note yields have dropped below 1%. Grand Supercycle-degree tops set Grand Supercycle records. Investor ebullience is the only thing that allows for an embrace of no-yield debt. The tidal wave of risk assumption, however, may be turning.
In other words: Expect the downward trend in yields to turn upward.
Shortly after that March 2020 analysis in the Elliott Wave Financial Forecast published, yields began to climb.
As you might imagine, bond portfolios have taken a substantial hit (bond prices sink as yields climb).
Shifting to corporate bond portfolios, Bloomberg had this headline on March 14 of this year:
Corporate Bond Rout Is So Severe History Books Need a Revision
The article goes on to say:
[U.S. corporate bond] losses have piled so high that they now belong in history books. A Bloomberg index of investment-grade returns is down 10.5% so far this year ... There is little precedent for drops of that magnitude.
Mind you, this was back in March and yields have risen since.
As a May 12 headline from the Associated Press said:
Bonds, haven for elderly and cautious, are getting torched
The question is: What does the Wave Principle say about this rising trend in bond yields?
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