Yield on the 30-year long bond peaked at 2.45% on March 18, 2021. Now it’s 1.88%.
Charts in this article are as of the market close last Friday.
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March 18, 2021 Yields
- 30-Year: 2.45%
- 10-Year: 1.71%
- 5-Year: 0.86%
- 2-Year: 0.16%
- 1-Year: 0.08%
November 5, 2021 Yields
- 30-Year: 1.88%
- 10-Year: 1.44%
- 5-Year: 1.06%
- 2-Year: 0.40%
- 1-Year: 0.15%
March 18 to November 25 Yield Change
- 30-Year: -57 Basis Points
- 20-Year: -47 Basis Points
- 10-Year: -27 Basis Points
- 7-Year: -4 Basis Points
- 5-Year: +20 Basis Points
- 3-Year: +32 Basis Points
- 2-Year: +24 Basis Points
- 1-Year: +7 Basis Points
Treasuries Most Sensitive to Rate Hiked
US Treasuries between 2 and 5 years in duration have been the most sensitive to rate hikes.
The 3-year treasury note seems to be the most sensitive at the moment to expected hikes.
Inflation Fears?
If there is a big wave of inflation yet to come, it’s sure not evident in long-dated treasuries 7-years or longer where yields have fallen since March.
What’s the Message?
The Fed is going to hike the US economy into a recession.
I don’t believe in autopilot for a year and neither does the bond market. Perhaps some do, and then some.
The Fed Announces an Autopilot Strategy: How Long Can It Stick With It?
For discussion, please see The Fed Announces an Autopilot Strategy: How Long Can It Stick With It?
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Source: https://mishtalk.com/economics/inflation-fears-nowhere-to-be-found-in-long-term-treasuries