From the desk of Willie Delwiche.
Key Takeaways:
- Bond yields rising as pressure mounts for Fed to raise rates
- From hints of new highs to expansion in new lows, the broad market is being tested.
- Commodities, currencies & bonds struggle with risk on message
With schedules of all sorts thrown off by travel and the Thanksgiving holiday (no Townhall conversation this week), this seems like a good chance to review a handful of charts that I’ll be keeping an eye on as we move toward year-end and into 2022.
The 10-year T-Note yield continues to move between its March high (near 1.75) and its August low (below 1.20%). Yields on 2-year and 5-year Treasuries have climbed to new recovery highs as the market has priced in Fed tightening. Given the inflation outlook, much of the debate is on why bond yields are still so low. Take a look at a chart of a global bellwether like Caterpillar (CAT) and the question might become, why are bond yields so high.
