US10Y 🇺🇸 U.S. 10-Year Interest Rate History (1913 - 2022)
One of the biggest "shocks" in the 22' financial markets is the breaking of the long-term (weekly) trend in Interest Rates — specifically the U.S. 10-Year Treasury (US10Y), which has gone through now two long-term trend cycles since it’s history dating back to 1913.
Given the inflation fight that the Federal Reserve is currently waging, while at the same time keeping in mind the structural debt-load that the U.S. 🇺🇸 is current burdened with, this begs the question can rates actually go higher from here?
While we do not know the answer as to the actual trajectory of interest rates into 23’ and beyond — what we do know is that given the structural debt load, we can speculate that at some point rates will likely be forced lower as a proxy of stabilizing inflation and also total debt servicing obligations of the U.S. Government.
Also keep in mind comments by J. Powell and the Federal Reserve as they have been preparing investors for a new macro regime of “higher for longer”.
Should this actually play out and not just be the "hawkish tone" of the Federal Reserve that is helping to push interest rates higher, investors must consider the ramifications that could come IF we have truly entered a new (rising) interest rate regime that includes structurally higher rates as part of the next 40+ year historical cycles.
Here is the same chart of the (US10Y) paired against the backdrop of other macro indicators including Federal Reserve Balance Sheet, as they give us insight as to both the bull and bear thesis for yields moving forward:
U.S. 10-Year (US10Y) vs. Fed Funds Rate (FEDFUNDS) 📊
U.S. 10-Year (US10Y) vs. U.S. Inflation Rate YoY (USIRYY) 📊
U.S. 10-Year (US10Y) vs. U.S. Federal Debt Total Public (GFDEBTN) 📊
U.S. 10-Year (US10Y) vs. U.S. Federal Reserve Central Bank Balance Sheet (USCBBS) 📊
U.S. 10-Year (US10Y) vs. U.S. Liabilities & Capital (WRESBAL) 📊
U.S. 10-Year (US10Y) vs. S&P 500 (SPX, SPY) 📊
U.S. 10-Year (US10Y) vs. Dow Jones Industrial Average (DJIA, DIA) 📊
What is your take on the forward trajectory of interest rates?
Given the inflation fight that the Federal Reserve is currently waging, while at the same time keeping in mind the structural debt-load that the U.S. 🇺🇸 is current burdened with, this begs the question can rates actually go higher from here?
While we do not know the answer as to the actual trajectory of interest rates into 23’ and beyond — what we do know is that given the structural debt load, we can speculate that at some point rates will likely be forced lower as a proxy of stabilizing inflation and also total debt servicing obligations of the U.S. Government.
Also keep in mind comments by J. Powell and the Federal Reserve as they have been preparing investors for a new macro regime of “higher for longer”.
Should this actually play out and not just be the "hawkish tone" of the Federal Reserve that is helping to push interest rates higher, investors must consider the ramifications that could come IF we have truly entered a new (rising) interest rate regime that includes structurally higher rates as part of the next 40+ year historical cycles.
Here is the same chart of the (US10Y) paired against the backdrop of other macro indicators including Federal Reserve Balance Sheet, as they give us insight as to both the bull and bear thesis for yields moving forward:
U.S. 10-Year (US10Y) vs. Fed Funds Rate (FEDFUNDS) 📊
U.S. 10-Year (US10Y) vs. U.S. Inflation Rate YoY (USIRYY) 📊
U.S. 10-Year (US10Y) vs. U.S. Federal Debt Total Public (GFDEBTN) 📊
U.S. 10-Year (US10Y) vs. U.S. Federal Reserve Central Bank Balance Sheet (USCBBS) 📊
U.S. 10-Year (US10Y) vs. U.S. Liabilities & Capital (WRESBAL) 📊
U.S. 10-Year (US10Y) vs. S&P 500 (SPX, SPY) 📊
U.S. 10-Year (US10Y) vs. Dow Jones Industrial Average (DJIA, DIA) 📊
What is your take on the forward trajectory of interest rates?
- Have we officially broken the 40+ year downtrend on structurally low interest rates, given the potential for entrenched inflationary pressures within the U.S. economy?
- Or, will rates be forced lower as structural debt obligations of the U.S. are far too great to support the notion of "higher yields for longer"?
To Wealth & Prosperity,
Kyle
Kyle
