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Treasury Bonds Poised for a Big Move

Published 05/08/2023, 01:59 AM
Updated 07/09/2023, 06:31 AM

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 Year Treasury Yield versus the popular iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT).

10-Year Yield Daily Chart

As you can see, both yields and bond prices have formed narrowing patterns… and both of these patterns are nearing completion.

If bond yields (blue) break down and bond prices (orange) breakout higher, we could see some mean reversion leading to lower interest rates. But if the patterns break the other way, it may mean higher interest rates.

Either way, something “BIG” is about to happen. Follow the breakouts or breakdowns.

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