The treasury yields have been in a decline for many decades, on the other side we have a very unique situation in the equity market. We have over evaluations in many markets, especially in the tech sector that was fueled by the billions of dollars pumped into our economy during he pandemic. The interest rates were heavily suppressed and this country experienced the lowest multi-decade interest rate environment in history. Like a charged spring it was ready to burst; we can see the bottom being reached in August of 2020 as everyone rushed to buy, refinance, take loans, buy cars and borrow more debt with the assistance of the stimulus payments. Of course this caused inflation to go through the roof.
Looking at the chart from an Elliot Wave perspective, keeping it simple and clean to understand, we can see an incomplete sequence with a beautiful extended 3rd wave, that is currently in progress of finishing wave "v" of the "(3)". I then expect a sizable 3 waves or triangle pullback down for wave "(4)". After the wave (4) pullback the sequence will still look incomplete and I will expect another wave (5) to the upside and into 2023. This will surely way heavily on mortgage lenders, those looking to buy a home, auto, or take out any new debt. Suddenly a 5% rate on US05Y becomes realistic. I expect other US treasury bonds like the 2, 10, 20, 30 year to rise and have similar wave structure as well.
Looking at the chart from an Elliot Wave perspective, keeping it simple and clean to understand, we can see an incomplete sequence with a beautiful extended 3rd wave, that is currently in progress of finishing wave "v" of the "(3)". I then expect a sizable 3 waves or triangle pullback down for wave "(4)". After the wave (4) pullback the sequence will still look incomplete and I will expect another wave (5) to the upside and into 2023. This will surely way heavily on mortgage lenders, those looking to buy a home, auto, or take out any new debt. Suddenly a 5% rate on US05Y becomes realistic. I expect other US treasury bonds like the 2, 10, 20, 30 year to rise and have similar wave structure as well.