From Reuters: U.S. Treasuries yields rose on Monday [to 2.51%], after falling to one-year lows last week, as investors were reluctant to buy bonds that offer low returns on expectations that yields will rise if the economy continues to gain momentum.
But, we wanted to know what you thought. Today’s poll question was: What’s the next stop for the 10-year?
At the time of this post, 62% said 2.25%; 38% said 2.75%.
Those who believe it will drop to 2.25% said, “inflation is not coming; it’s already here.” Additionally these voters said:
- "Greater probability 10yr yield falls than rises. Some factors that point to US Slow Growth: 1. Recent quarter of decreased business spending, 2. Increasing costs drag on US consumer, 3. Lack of US equities volume, 4. Significant draw down in growth stocks, 5. Diminishing impact of foreign buyers of US Treasuries means further monetizing of US spending and, 6. Possibility of euro strengthening based on overall tighter monetary policy and in response to what the ECB does this week. Simply, US economic outlook is less positive now than Q313 or Q413, so Fed intervention will continue to try to induce consumer spending when most consumers financial situation doesn’t allow greater discretionary spending."
- "US growth is slowing. The Fed will predictably move toward lower rates for even longer. The Fed playbook has one play - easier policy no matter what."
- "European central bank looks like going negative on rates on fears of deflation - can US be far behind?"
- "The Fed will keep printing $$$."
Hedgeye CEO Keith McCullough agreed that the next stop for the 10-year would be 2.25%: "The Fed's Policy To Inflate = #InflationAccelerating, and inflation slows growth (bad for bond yields)."
Conversely, of those who voted 2.75%, one person explained, "Look at price of wheat, corn etc. since May highs, straight down. That’s deflating your inflation."
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