Is the U.S. 10-Year Treasury note telling us anything about what the Fed might say -- or not say -- next week?
One thing that the recent upmove in yield suggests is that despite deflationary implications of recent U.S. economic data on Retail Sales, Consumer Confidence and PPI -- and despite implied deflationary pressure exerted by a rocketing U.S. dollar, plunging oil, copper and subdued gold -- the 10-year yield remains elevated.
In fact, at around 2.10%, yield is 28% above its Jan. 30 low!
In view of the surrounding circumstances and looking at yield within the context of the 8-year weekly chart, the pattern certainly has the makings of a multi-year accumulation period.
Could the chart be forewarning us that Yellen & Co. intends to move toward "normalization"?
Or perhaps just the opposite: the Fed intends to back away from normalization in a near-desperate attempt to derive inflation from anything other than equity prices.
The yield picture awaits the next catalyst to ratchet higher.
Will Yellen comply?
