I have been long on Treasuries ( TLT
) for a few weeks now and the case to be long keeps getting better. After a deep selloff and a disruptive battle over the debt ceiling TLT
has been basing and moving higher. As of this writing the 10-year treasury is yielding 2.61%. I believe we'll see below 2.5% soon and as low as 2.2% possibly. Much of the rise in yields has been driven by the "taper" talk. Doves such as Fed Bank of Chicago president Charlie Evans is looking for reasons to postpone any tapering.
With no inflation
in the government statistics and a dovish Fed staying dovish with the appointment of Janet Yellen the "tapering" will continue to be postponed. See the chart.