Long-term Treasury Yields Set to Break Out: What It Means for Investors
Long-term Treasury yields are on the move, breaking out from a bull flag pattern. On December 15th, experts noted that the 30-year Treasury yield was in a bull flag on its monthly chart. This pattern represents a disinflationary phase that has been anticipated and closely followed. If yields were to drop even further within this pattern, it could indicate an extension of this phase or an increase in deflationary fears.
However, if the flag breaks out to the upside, it could spell trouble for the incoming president and the economy he will oversee. Rising yields could complicate the Federal Reserve’s ability to cut rates and manipulate Treasury bonds. As it stands now, long-term credit is more expensive than it has been since 2011.
Experts suggest that we may have already seen the end of an era in 2022 with a significant trend break in long-term bond yields. This shift could have wide-ranging implications for the economy and markets. The month is poised to close with the flag breaking to the upside, indicating potential trouble ahead.
While some market signals during the holiday season may be misleading, if this trend continues in January, many investors and even the Fed could be caught off guard. The Continuum, a key macroeconomic signal, has been hinting at an upward trend since 2022. This could mark a significant shift in market dynamics that few were prepared for.
The ruptured trend in 2022 signaled a departure from past expectations and trends. The era of predictable market rebounds may be coming to an end, challenging long-held beliefs about market behavior. This shift could have profound implications for investors and policymakers alike.
It’s important to stay informed and adapt to these changing trends. For comprehensive market analysis, consider subscribing to NFTRH Premium for in-depth reports and updates. Stay up to date with actionable content on NFTRH.com or sign up for the free eLetter. Follow along on Twitter for the latest updates.
