Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Jeremy Selph
May 12, 2023 11:36AM ET
nice
0
0
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
👀 Bezos, Buffett & Berkowitz: What's in Their Portfolios? Unlock Data
10-Year U.S. Treasury Yield Peaks as Fed Signals Pause
www.investing.com/analysis/10year-us-treasury-yield-peaks-as-fed-signals-pause-200638010
10-Year U.S. Treasury Yield Peaks as Fed Signals Pause
By James Picerno | May 11, 2023 07:47AM ET The wide spread between the US 10-year Treasury yield and CapitalSpectator.com’s lesser fair-value estimate continues to narrow, albeit slowly. As outlined on these pages in recent months, the model continues to project a lower market rate ahead. Timing is unknown, but today’s revised analytics reaffirm the forecast.
The 10-year yield continues to trade well below its peak, ending yesterday’s session at 3.43% (May 10). As recently as early March, the benchmark rate hit 4.08%. But as we discussed later that month, the fair-value model pointed to a lower market rate in the months ahead, and so far, that forecast remains intact in today’s update.
The current fair-value estimate is 2.75% for April, virtually unchanged from the previous month. The fair value is based on the average of the three models defined here.
10-Yr Treasury Yield vs Avg of 3 Fair Value Model Estimates
The market rate is still well above the average estimate, but this spread continues to decline, albeit slowly. The gap eased to 71 basis points in April, a seven-month low.
10-Yr Treasury Yield less Avg of Fair Value Estimates
The spread still looks set to narrow further. If inflation and economic activity turns substantially higher, the forecast could be undermined. But for the moment, the odds for those scenarios are unlikely for the immediate future.
The Federal Reserve is expected to provide a degree of support for a further narrowing of the spread. Fed funds futures are currently estimating a high probability that the central bank will pause its rate hikes at the next policy meeting on June 14.
“We expect the FOMC to maintain the federal funds rate at its current level for the foreseeable future and for inflation to slow further in the months ahead as supply pressures continue to ease and demand growth weakens,” Wells Fargo’s economics team wrote on Wednesday.
Related Articles
Long Treasuries Top Bond Market Returns This Year
By James Picerno - May 18, 2023
Last year’s famine has turned to feast in the bond market in 2023 as the riskiest slice of fixed income tops year-to-date results through yesterday’s close (May 17), based on a set...
Treasury Bonds Poised for a Big Move
By Chris Kimble - May 08, 2023
1
As the Federal Reserve continues to fight inflation by raising interest rates, the market is growing uncertain about future rate hikes. Today, we share a chart comparing the 10...
Rates Spark: Bonds are Back… In Their Range
By ING Economic and Financial Analysis - Apr 26, 2023
Markets are understandably skittish about the health of the financial sector, which allows bonds to act as a safe haven. We would be wary of acting on large market moves ahead of a...
10-Year U.S. Treasury Yield Peaks as Fed Signals Pause
Comments (3)
Mahdi Oummih
May 11, 2023 9:58PM ET
It is likely that the regional banks will continue to go under as they lent money out at interest rates that are less than a third of what is available now for 30 year + and just a couple of short years later they are at 6% and 7% on loans that they gave out as low as 2%! Does not take a rocket scientist to know that the Equities market is going to crash in value along with the financial markets. Just a question of how far it will go and when the house of cards will start collapsing in earnest. The only way to avert this is by seriously raising taxes on Corporations and reducing spending at the same time.
2
0
gary leibowitz
May 11, 2023 6:56PM ET
Stating the obvious. Fed already promised a pause. Disinflation however is gone goodbye and with it a slew of bets that will take us under. Banks, Real Estate, and frankly all asset classes that relies on cheap loans, easy money, and lower rates going forward. The Street in a panic over rates NOT being cut NOW! Daily we get regional banks underwater and one run after another. It will spill over in other assets and it will cause our undoing. 40 years of disinflation is a hard habit to break. Count on inflation to be with us longer than we stay solvent.
0
0
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.