UST2Y 2-Year Treasury Note Yield Daily Chart; 38-Year Plus Note and Bond Rally Rolls Along; 2-Year Yield at Record Low Teasing Negative Rates

The 38-year plus US Treasury bond and note rally continues. It was a big deal when it stretched on to three decades but it is a four-decade affair now. Shout-out to A Gary Shilling the only analyst that called the long term note and bond rally (higher prices lower yields) in the 80's. Traders and analysts laughed at such a stupid call but Gary was the only one that was correct.

The multi-decade path of lower highs and lower lows in yield continue into an expansion, or megaphone, pattern. When yield does decide to recover it will target that upper blue trend line but that can be a couple few years away. Inflation and hyperinflation will occur in the future but the economy remains in disinflation. People are touting the reflation theme lately but that is due to wages moving higher which only occurred because the huddled masses were sh*t-canned in the pandemic while the wealthy folks never missed a paycheck. This drives the wage increases higher which feeds into the reflation narrative.

President Biden's attack on energy does not help either. He canned 11K workers in the Midwest on the Keystone pipeline project so that destroys many American families. Gasoline prices are already moving higher (oil moving higher) since the president is unfriendly to oil. This feeds the reflation narrative as well but these conditions will abate.

The 2-year yield drops down to record lows teasing the 0.105% all-time low from 2020. The whisper talk begins about the yield possibly threatening the zero bound. Pope Powell decrees for many months that the Fed would never implement or tolerate negative rates. Powell is starting to have some sleepless nights. The fiscal package in Congress is unclear. Jobs are not recovering as fast as expected. 

The Fed says it will never consider going to a negative rate policy and has never brought the benchmark rate into negative territory before. Europe is not benefiting from negative rates. The Trumpster was a proponent of negative rates. A negative rate simply means that the credit card and mortgage rates would be a tad lower but the savings rate would also be lower. The Federal Reserve's sick 12-year Keynesian financial experiment continues but the jury remains out as to the conclusion. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 9:53 AM EST: Treasury yields are; 2-year 0.11%, 5-year 0.48%, 10-year 1.19%, 30-year 1.99%. The 2-10 spread is 108 bips. The 5-30 spread is 151 bips. The 30-year yield is at 2%. The 2-year yield threatens the lower bound. The 10-year climbs towards 1.20%. Yields probably have a week or two before they top out. You need to see the MACD line go neggie d on the weekly chart to know the top in yield is in for the 10-year and the multi-week move lower in yield begins.