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30Y Treasury Yield Surges Back Above 3.00% Pre-Fed Hike Levels
Having seen long-bond yields collapse on heavy volume immediately after The Fed's decision last week to hike rates, it appears the "policy error" message was just too much to bear for an un-manipulated market. The last 2 days have seen a very light volume 13bps surge in 30Y yields, now back above the Maginot Line of 3.00% - erasing any "policy error" questions post-Fed... for now.
Of note is the fact that China's Yuan has strengthened the last 3 days - correlating with the weakness in Treasuries.
Charts: Bloomberg
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All is well. - Yellen the Fed Felon
Policy Error = fed's actions over the past 102 years
"Crimes are in the eyes of the beholder"-Janet Fellen
America has a magic negro AND a magic jew
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The bankster gangsters will ALWAYS choose stawks over bonds.
ALWAYS.
That trend won't continue for too long.
Who in their right mind would buy 30 year notes?
-Argenta
Steepening of the yield curve.
Please correct me if I'm wrong here but...
Since yeilds are inversly related to bond prices, and the FED raised interest rates by 25 basis points, shouldn't the yield go up at least a little from this?
One point where I disagree with the HEDGE is that I see a lot of articles trying to correlate market events to price action. Sometimes it takes a few days for markets to adjust. Sometimes not. But trying to rationalize every market rise and fall is an exercise in futility. Technicals are different than Fundamentals in that the Technicals can tell us what the market is doing right now but Fundamentals cannot be ignored in the long run.
Interest rates are along the lines of Fundamentals and their impact on the market cannot be timed exactly. However, they cannot be ignored. Raising interest rates has a huge effect on a false recovery - mainly making government debt more expensive.
This is why yields are rising. Bonds are already in a historic bubble. We've seen what can happen to yields when the ability to service that debt is called in to question as has happened in Spain.
The US is in very big trouble across Federal, State, and Local municapilities as it is loaded with debt that cannot be serviced. The national debt is greater than 19 trillion and has gone parabolic under Obama. No one seems to notice.
For me, it's not a matter of if, but when yields skyrocket. The only thing that would prevent such a catastrophe is for the government to unleash QE+Infinity in order to BUY it's own debt and thus inflating the currency away into oblivion. I do believe this is what they will do eventually as ECONOMIC FORCES IN MOTION TEND TO STAY IN MOTION and the powers that be will do "whatever it takes" to maintain their power.
Always remember, yields rise=bond prices fall and vice versa. With the western world at ZIRP, there is nowhere for yields to go but up, regardless of what the FED does with interest rates.
Remember, bonds are only good so long as the debt can be serviced. If not, a "loss of faith" can occur which would cause yields to skyrocket. History has already shown us the way if only take the time to look.
That anyone would buy bonds for such a low or negative interest rate blows my mind. US paper should be considered junk.
I trade treasuries, earned $65K on the pre-to-post FOMC rise and fall in rates.
I will very eagerly and delightfully take ALL such "junk".
"The US is in very big trouble across Federal ... as it is loaded with debt that cannot be serviced."
Absolutely wrong nonsense - the USA Federal government has ZERO problems servicing, redeeming and reissuing its debt.
Some state and municipal governments do have serious problems with their debt, which is relatively illiquid, no international market for their debt and they do not have their own central banks.
You are just regurgitating garbage dogma from the high priests of the gold cult.