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Treasury Yields Test Downtrend With Inflation Genie ‘Out Of The Bottle’
Investor angst remained palpable Tuesday, as bonds threatened to extend losses on persistent inflation fears and ever-present policy jitters, before ultimately rallying after core CPI came in cooler than expected.
10-year US yields were still near the highest since 2018, and markets remain obsessed with a breach of the four-decade downtrend. A close above ~2.83% would make it official.
At various intervals over the past couple of weeks, I've been tempted to suggest this is mere trivia -- what
Seems like it is indeed almost time to dip but some Treasury bonds at least. 3 to 3.5%? They’ll be gobbled up.
Chartists have been watching that chart for some time of course. One of the resident kingpins over at stockcharts.com scribbled an article some days ago using the same chart and trend line, but, no predictions or buy and sell recommendations were made. Old chartists can be pretty humble, probably, has something to do with random-walks, the impossibility of forecasting knock-on effects on a networked globe, and just being wrong so often that over-confidence bias is finally whooped. Sad fact is, when a chaos of conflicting opinions/narratives don’t stop a price-line from trending you are still better off knowing that information than not if you use anything resembling “optimal stopping” theory in your mental models.
But, if it weren’t for elven chartists and their squiggles, lines and curves what would happen to the output volume of Financial Media as we currently experience it? Think #Words:Picture ratio. Louis Richard Rukeyser, may he RIP.
And so ends a slightly longer comment box test message craftily designed to get past temsikA …
I am in no way an economic expert, in spite of many doctoral courses trying to take me there in the dark past. However, I do know (just) enough to about business to know that supply chain problems, lingering COVID issues, and parts shortages are not going to be reversed by anything the Fed can do to interest rates. Trying to solve a problem by attacking something other than the actual root cause(s) is an effort doomed to fail.
Totally agree, but as Winston Churchill is rumored to have said, “Never let a good crisis go to waste”. And then there is: “It is better to give a poor or implausible excuse—which may, in fact, be believed—than to have no explanation or justification at all.”