Bond Market – Weekly Analysis

It looks like the Treasury’s attempt to pressure the long end of the curve lower may have produced the opposite effect. Have they forgotten about the spread—and the potential implications of their move? As Jean de La Fontaine famously observed, “One often meets his destiny on the road he takes to avoid it.” Those who haven’t yet may want to bookmark the long-term bond chart we first outlined in December 2022—and perhaps save a copy for the next generation. Things are getting increasingly rotten in the bond kingdom. Nearly three years ago, we warned that a major rate rally could be developing. That roadmap remains very much alive, and the bond market is now sending signals that are becoming increasingly difficult to dismiss. The question is no longer simply whether yields can move higher, but how far the larger structure may still have to run. This week brought plenty of…