UST10Y US 10-Year Treasury Note Yield Weekly Chart; 40-Year Bond Rally Ending

Many of you reading this were not even alive in the early 1980's. The United States was in a wicked recession, the worst economic times since the Great Depression. Ronnie Ray-gun took the presidency and busted the unions opening the floodgates to cheap labor overseas and the beginning of the end of America's middle class. The Fed buys bonds maintaining low rates.

The 3% level for the US 10-year compares back to the summer of 2011. It's a big deal.

The 4-decade bond rally is remarkable. Bond prices move opposite of yield. As folks worry about the future, and economy, and want to play it safe, they buy bonds. Prices rise and others chase the same bonds, so yields drop through the 80's, 90's, 00's and 10's. The 20's are taking on a different posture as traders and investors are selling notes and bonds with yields rising.

At that low yield in 2012, it felt like the 30-year bond rally was finally over, but it was not. That sideways purple channel at 1.4%-3.3% remains very much in play. The 30-year bond rally may have been finished but COVID-19 hit and people ran to Treasuries with fistfuls of money believing the world was ending. 

The 10-year yield pokes above the long-term downward-sloping blue trend line a big deal. Price is above the 200-week MA. The 50-wk MA is about to cross above the 200-wek MA. Yield likely has its eyes on the 3.2%-3.3% resistance.

Yields are topping-out right now on the daily chart so the 10-year will likely retreat for a few days (bonds getting bid) but the weekly chart continues displaying a long and strong MACD line with other indicators neggie d. Thus, yields will drop for the next few days but then reverse again and come up for another high on the weekly basis since the MACD has juice still yet. The 10-year yield will drop over the coming days and then come back up and likely top-out in a week or two when the MACD on the weekly goes neggie d.

This will begin a multi-week decline in yields. So all the folks opining about runaway inflation and yields to the moon will still have their day for a couple weeks but then yields will roll over for a several week  retreat. The wild card is the Federal Reserve meeting announcement tomorrow which can blow holes in any forecast.

Yield will retreat to 2.80% probably, perhaps a quick plunge to 2.50% in the days ahead if Chairman Powell coughs tomorrow and it sounds like 'sell stocks buy bonds'. Then a quick rebound back up to 3.0% and higher perhaps targeting 3.2%-3.3% over the next 2 weeks where yield likely tops out for the next several weeks. 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 Friday Afternoon, 5/6/22,at 1:00 PM EST: The 10-year yield drops to 2.91% after the Federal  Reserve hikes the key rate by 50 bips on Wednesday afternoon. Then, a dramatic reversal occurs sending the 10-year yield to 3.13% now at 3.08%. The daily chart remains neggie d so yields should roll over lower but the weekly chart remains long and strong so after several days of yields dropping, say to 2.80%-2.91%, the 10-year will come back up again for higher highs in yield (lower prices), perhaps on the way to the 3.20%-3.30% range on the weekly basis.

Note Added Thursday Morning, 5/12/22,at 6:00 AM EST: The 10-year yield rises to 3.20% first then falls on its sword dropping to 2.82%. The yield is spanked down by the neggie d on the daily and weekly charts.

Note Added 5/19/22: 10-year yield 2.77.

Note Added 5/25/22: 10-year yield 2.71. Yield is down about 50 basis points from the peak a couple weeks ago.