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Interest Rates , Investing

Why Investors in U.S. Treasuries Face Major Risk

Rising rates will be “disastrous” for governments, other debtors and creditors

by Bob Stokes
Updated: October 27, 2022

The market for U.S. Treasuries is the biggest bond market in the world, and it appears that potentially big trouble may be afoot.

Earlier this month, none other than the U.S. Treasury Secretary herself (Janet Yellen) acknowledged ...

..."a loss of adequate liquidity in the [U.S. government debt] market."

Then, in a statement last week, Bank of America strategists expressed concerns about...

..."large scale forced selling [of U.S. Treasuries]."

No wonder other analysts and traders have voiced worries about U.S. Treasuries being a potential key factor in the next financial crisis.

It may interest you to know that Elliott Wave International has been ahead of this developing story.

In April of this year, The Elliott Wave Theorist showed this amazing chart and said:


Because of the 39-year symmetry in this picture and the unprecedented arrival of negative interest rates, we have been adamant that interest rates bottomed in 2020. Sure enough, they have been rising since. ... Rising interest rates will be disastrous for governments and other debtors as well as for creditors who hold long term bonds.

Fast forward to our Oct. 21, 2022 U.S. Short Term Update, which noted:

[U.S. Treasury long bond futures] are collapsing, as rates shoot higher. The yield on ... 10-year treasury paper pushed to 4.34%, its highest level in 15 years. Bond investors are being absolutely crushed.

Of course, when bond yields rise, prices fall.

The question now is: Is the rise in yields almost over or do they have a lot further to go?

Well, an Oct. 21 Reuters article said:

Some investors believe Treasury yields are close to peaking...

All financial markets have countertrend moves and it's certainly possible that one is ahead for U.S. Treasuries.

Yet, what's important to know is the main trend.

Follow the link below to get our forecast.

Why the New October Elliott Wave Theorist

Should Be on Your Computer Screen

Why read the new October Elliott Wave Theorist? The title of the latest Theorist says it all:


Is the decline "over" or "nearly so"? Consider this Theorist remark:

"The sharp bounces of late have encouraged many bulls to believe that the bear market is over. But sharp rallies are part and parcel of bear-market behavior."

Delve into the important details in the October Theorist via the link below.

Financial Forecast Service


All month long, Financial Forecast Service helps you stay ahead of the waves in the U.S. markets on the timeframes that matter the most. FFS covers the stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. It is our most popular service.

Comprises the monthly Elliott Wave Financial Forecast, 3x-per-week Short Term Update and at least 12x-per-year Elliott Wave Theorist.

Mood Riffs: Civil War in Pakistan? Plus, the Art of Vandalism

Our Video Mood Riffs feature goes beyond the markets to examine social and cultural trends. The new episode explains what Pakistan's stock market trend says about the country's civil war prospects, plus brings you a one-of-a-kind take on why we've seen so many cases of art vandalism lately.

Commodity Prices: After 1 Year of Declines, What’s Next?

Commodity prices and emerging markets tend to move together. Watch our Global Market Perspective contributor Mark Galasiewski walk you through a chart of Invesco DB Commodity Index Tracking Fund (DBC) to show how well it's been following its Elliott wave path.

“One of my favorite Elliott wave patterns”

How many euros does one Swedish krona buy? That's not your everyday question -- unless you're a forex trader. Watch European Short Term Update Editor Murray Gunn walk you through a EUR/SEK chart for some useful insights.