Premium"Here We Go Again": Fed's "Original Sin" Means 10Y Yields Are Going To 8%, TS Lombard Warns
With the 10Y yield hitting 5.30% on Wednesday, the highest since 2002, much of Wall Street is asking whether 6% is next (for the record, some already think so, and we flagged the case back in August in "A 6% Yield On The 10 Year Treasury Is Coming"). For TS Lombard's chief US economist Steven Blitz, that's thinking far too small.
In a note titled "Original Sin Redux" published this morning (and available to pro subs), Blitz argues that the current rise in yields "is not done at 6%": 5.75% is the next plateau for the 10-year, and 8% is the long-run target, reached over "a few years" and with "plenty of zigs and zags along the way."