In short, we don't think so.
In the chart above, you're seeing the 10y30y spread and the 10y yield.
The 10s30s is a barometer of the inflation risk premium.
And quite frankly, the market isn't buying that inflation will be sustained.
Yes, the 10y yield is indicating perhaps to many that there is some kind of inflation risk, but from the Macrodesiac view, all...
This chart shows three times during the past three decades in which the yield curve inverts. An inversion is when the rate of a shorter term debt security is higher than the rate of a longer term debt security. This is identified on this chart in 2000, 2006, 2019.
Treasury Debt Securities:
Bill; less than one year to maturity at issue.
Note; greater than one year...
Interesting price action on US 30 year bond. Inverse head and shoulders potentially developing at previous breakout area.
Fibonacci retracement levels nicely coincide with current level.
There's always the backdrop of more QE and a deflationary shock that could result in a double bottom or worse... At least the floor is 0% right lol? What a mess
Idea for US30Y:
- Bond yields dropping rapidly.
- Bonds are being bought up for 1 of 2 reasons:
(1) Investors are afraid and would rather hold negative yielding bonds than other risk assets.
(2) We are experiencing deflation, despite the media blaring inflation.
Idea for Macro:
- Credit Cycle turned down from top of Risk Range.
- Global Credit Impulse negative, US Systemic Liquidity Flows turning down, Fed Balance Sheet 5yr avg. at top of risk range.
- Demand-push Inflation at top of risk range, in 40 year downtrend.
- Implied Volatility vs. Realized Volatility reaching a critical level.
- PC ratio reaching low levels...
The problem that we believe to be fundamental is this: will it be possible to pass on the rise in the prices of raw materials to the final consumer? Or will we have a generalized rise in prices with a stagnant economy? Which will lead us to stagflation. The advantage of Treasuries is that they pay you to wait.
This is the U.S. Government Bond 30Y Yield from 1988 until today. I chose this hyper long-term chart on the 1M (monthly) time-frame as with bonds being the talk of the month as for reasons that may move stocks, Gold etc lower, I wanted to get a good understanding of what the real long-term picture is.
This illustrates a clear and standard Channel Down. I have...
Hoping for 10y yield to retreat relative to 30y yield, which would usher more strength and stability. Seems contingent on a sub 1.5 10y yield. The falling wedge gives me a lot of hope despite a false breakout near the end of January.