Are Treasury Yields Rising TOO Fast?

By Anthony B. Sanders

MOVE And Tyvix Spike (Do The Fed Tighten Up?)

Bridgewater Founder Ray Dalio said back in January 2018 that “A 1 percent rise in bond yields will produce the largest bear market in bonds that we have seen since 1980 to 1981.” 

Well, we are still in a higher bond duration section of the Price/Yield curve where further increases in yield shifts can clobber Treasury prices.

duration10.png

Like the recent decline in 10-year Treasury Note prices.

fedtighten

Given that the US economy is exposed to an all-time high in interest rate senstivity, it would behoove The Fed to “take it easy.”

OFR duration

Merrill Lynch’s Option Volatiltiy Estimate (a yield curve weighted index of the normalized implied volatility on 1-month Treasury options which are weighted on the 2, 5, 10, and 30 year contracts) and the TYVIX 10-year volality index both spiked recently.

movetyvixd

So let’s see how far The Fed will keep on pushin’, perhaps too hard on equities.

spxfedfarbast.png

But fixed-income (bond) funds have been getting beaten since Yellen announced the end of QE in 2014, the beginning of “The Tighten Up.”

januspimcofunds

Yes, Jay Powell & the Drecks from Washington DC are doing the “tighten up.” But should they slow down?

japowelldreck.png

Support 100% ad-free Biiwii.com by making a donation of your choice!

Or better yet, subscribe to NFTRH Premium for an in-depth weekly market report, interim updates and NFTRH+ chart and trade ideas to get even more bang for your buck. You can also keep up to date with plenty of actionable public content at NFTRH.com by using the email form on the right sidebar. Or follow via Twitter @BiiwiiNFTRH, StockTwits or RSS. Also check out the quality market writers at Biiwii.com.

Published by

Gary

NFTRH.com & Biiwii.com