In the past month, yield on the long bond bounced 23 basis points. Why?
There is no technical support nor technical basis for that bounce from 4.52 percent. That means it’s fundamental, or it’s a bounce for no reason at all.
30-Year Treasury Yield Monthly Chart
Ascending Triangle AI Overview
An ascending triangle pattern is a bullish continuation chart pattern formed by a horizontal resistance line and an upward-sloping support line. It shows increasing buying pressure, as prices repeatedly test the same highs but make higher lows. Traders look for an upward breakout above the horizontal resistance, confirmed by increased trading volume, to indicate the pattern is complete and the trend will likely continue.
Technical Meaning
Technically, the expected pattern is for yields to breakout to the high side.
But technical patterns don’t always work. So, what are the fundamentals?
Fundamental Picture
Jobs are weakening dramatically. That normally would indicate more rate cuts on the way.
However, the Fed has a dual mandate on jobs and inflation.
Unfortunately, the Fed is flying blind. CPI data is missing due to the government shutdown. The October data release is likely to be cancelled.
If so, the Fed will not have CPI data for the December 10 FOMC meeting.
Data When?
| Release | Reference period | Previously scheduled release date | Revised release date | Time |
|---|---|---|---|---|
| Employment Situation | September 2025 | Friday, October 3, 2025 | Thursday, November 20, 2025 | 8:30 AM ET |
| Real Earnings | September 2025 | Wednesday, October 15, 2025 | Friday, November 21, 2025 | 8:30 AM ET |
The above information is from a BLS update so the dates are firm.
Note the reference period is September. That is data fully collected before the shutdown. We will not have those until November 20-21.
I expected the Employment Situation next week, but earlier.
Real Earnings is a PCE (not CPI) inflation report. But it’s also for September. I doubt we have inflation numbers for October at all (either PCE or CPI).
The CPI report for September was already released. And that provides clues for PCE, so expect no major PCE surprises.
Jobs Outlook
- ADP: On November 6 I noted Private Employers Added 42,000 Jobs in October, First Increase Since July
- Revelio: On November 7, I noted Revelio’s Realistic Assessment of the US Labor Market and Jobs – Sinking Fast
- Challenger & Gray Layoffs: On November 6, I noted Cost Cutting Hits Jobs. October Layoffs Surge to Highest Level in 20 Years
- Richmond Fed: On November 6 I noted Richmond Fed Survey Shows Small Businesses Impacted More by Tariffs
Today, I noted ADP Pulse of Net Private Job Creation Drops to Negative 11,250 Per Week
-11,250 per week * 4 = -45,000
That negates the first link above showing 42,000 job gains for October.
On November 13, I noted Fed Rate Cut Odds Dip to 50%. Market Throws Tantrum
According to CME Fedwatch, the odds of a December rate cut fell to 51.9 percent today from 62.9 percent yesterday and 95.5 percent a month ago.
This is not on any economic news that I can see. Rather it’s attributed to a statement by Sue Collins, a voting member on the FOMC.
“Absent evidence of a notable labor market deterioration, I would be hesitant to ease policy further, especially given the limited information on inflation due to the government shutdown,” Collins said in prepared remarks on Wednesday.
That seems a bit peculiar because the labor market is undoubtedly soft. What the Fed will not know by the December 10 meeting is what the inflation picture looks like.
Technical Plus Fundamentals
The fundamental (jobs + Fed statements) plus the technical charts creates an ominous-looking combined synopsis.
Q: What’s the combined take?
A: Stagflation
Once again, however, we are all flying blind, not just the Fed. I had a discussion with a friend on this today.
My Private Comments (Now Public)
The question at hand is not about weakening jobs. And weakening jobs plus stubborn inflation looks like stagflation.
But how long? I think it will be stagflation-lite, not long-lasting (at least in the short-term and possibly mid-term).
Q: Why?
A: Demand destruction from collapsing jobs, an AI slowdown, and continued tariff-uncertainty will sooner or later weaken the inflation impulses.
I expect sooner. Possibly, that’s why yields have not blasted higher already.
However, the long-term forces remain net inflationary. And the long-term chart shows that concern.
The deficit picture is a disaster and gold echoes that picture.
Gold declined today. Why? The short-term picture is the Fed may pause or slow cuts. That news should be good for long-term rates (but it wasn’t).
These are the competing forces. My view remains flexible, except on jobs where destruction looks huge.
Demand destruction looks to follow, and that should cool inflation (at least as measured).
Dave Smith “I tend to believe the fed only pretends to adhere to the full employment and stable prices objectives when it is in the interest of their owner banks.”
Mish: Very close. The Fed does what it wants and makes up excuses to do it. That’s easy because of the dual mandate. They focus on jobs and “inflation expectations” not inflation.
That pair let’s them do whatever the hell they want. “Inflation expectations are well anchored” How many times have we heard that BS?
the dual mandate is a joke. the only real mandate is to keep their shareholders, the NYC bankers in high cotton. if you don’t understand this, it is a handicap. study how and why the FED was reinstituted as the 3rd central bank of the usa. history will show you the truth. after the first mandate i explained, they might give a hoot about a stable currency and employment. maybe.
The American Bankers Association is public enemy #1.
or public HERO 1. depending on one’s career and hood.
Banks don’t lend deposits. The bankers compete for the deposits that they collectively already own. In the system, an increase in TDs depletes DDs dollar for dollar.
But that’s not the worst of it. All bank-held savings are lost to both consumption and investment, indeed to any type of payment or expenditure. The “Taper Tantrum” is prima facie evidence.
As Luca Pacioli, a Renaissance man, “The Father of Accounting and Bookkeeping” famously quipped: “debits on the left and credits on the right, don’t go to sleep with an imbalance”.
The elimination of Reg. Q Ceilings was a ruse perpetrated by the ABA.
WSJ: “In a letter of March 15, 1981, Willis Alexander of the American Bankers Association claims that: ‘Depository Institutions have lost an estimated $100b in potential consumer deposits alone to the unregulated money market mutual funds.’
As any unbiased banker should know, all the money taken in by the money funds goes right back into the banks, in the form of CDs or bankers acceptances or other money market instruments; there is no net loss of deposits to the banking system. Complete deregulation of interest rates would simply allow a further escalation of rates by the banks, all of which compete against each other for the same total of deposits.”
Written by Louis Stone whom the movie “Wall Street” was dedicated to – Vice President Shearson/American Express
In almost every instance in which Keynes wrote the term bank in the General Theory, it is necessary to substitute the term financial intermediary in order to make the statement correct. This is the source of the pervasive error that characterizes the Keynesian economics, the Gurley-Shaw thesis, the elimination of Reg Q ceilings, the DIDMCA of March 31st, 1980, the Garn-St. Germain Depository Institutions Act of 1982, the Financial Services Regulatory Relief Act of 2006, the Emergency Economic Stabilization Act of 2008, sec. 128. “acceleration of the effective date for payment of interest on reserves”, etc.
Retail MMMFs are misclassified. They aren’t money. They are a double counting.
Mises has it right:
“The definition of M2 includes money market securities, mutual funds, and other time deposits. However, an investment in a mutual fund is in fact an investment in various money market instruments. The quantity of money is not altered as a result of this investment; the ownership of money has only changed temporarily. Hence, including mutual funds as part of M2 results in the double counting of money.”
Grant is a snitch, but he’s right about the deficits that must the monetized to be funded.
Thanks Spencer, I always appreciate your scholarship and insight. It is a tangled web composed of deception,smoke and mirrors. It is hard to wrap ones self around any of it because it is like looking at a Yogi-ism in a mirror while standing on ones head. You are the one who taught me that Banks Don’t Lend Deposits. I have never looked at the same since.
Correct – Not aware of anyone who counts mutual funds as money supply
The November 7 edition of Grant’s argues that the Fed’s true mandate has become financing of the public debt. I find that hard to dispute, because seemingly everything else in the economy–including inflation and jobs–depends on the apparent health of the national credit.
Good publication pays for itself
Debt hit $38.2 trillion this week, Yield is rising since the Fed lowered rates and announced the end of QT. Is another credit downgrade coming for the US?
RISK?
The ensuing rise in real yields will kill bitcoin.
US debt would have to yield 6% before they are getting any further allocation of my investments. With the extreme appreciation of gold, I am a bit overweight on the mining stock front and dividends are not keeping up (although on my initial investment I’m over 4%). With gold moving with the market I think there is some additional risk but… That is counterbalanced with insane spending and debt accumulations.
The FED has been running the economy in reverse for many decades. Like Mish says, it could take some draconian measures to correct years of mishaps.
Trump wants zero percent rates, which he will get, so his rich friends (private equity and hedge funds, who are now being revealed as owning a LOT of America already — at least 15% of all housing is investor-owned) can buy up the rest of America that they didnt buy up in 2008-2020. Inflation doesnt matter to a dictator and neither do jobs. You will rent and you will make minimum wage and you will be happy.
The upcoming recession could well be unique, in that it will result in HIGHER interest rates (as deficits explode to $4-$5 TRILLION), not lower.
https://wallstreetonparade.com/2019/11/these-are-the-banks-that-own-the-new-york-fed-and-its-money-button/
my old man, who started at 100 wall street in the 1930s only trusted, bank of NY, to keep his money somewhat “safe”
The old joke about Bank of New York (founded by Alexander Hamilton) – “When Hamilton left the office to have his duel with Aaron Burr, he instructed the staff ‘Don’t do anything until I return’”.
haha. have heard that one decades ago. i have an old friend who proudly brags he’s a direct descendent of Aaron Burr. in charleston SC people loved that. all jeffersonians down there.
30-year bonds are a sure loser. Inflation will make them worthless.
As always the market is smarter than all the PHD’S at the Fed or Treasury – the 2 year yield typically points the way for adminstered rates and remains well below the current Fed rate suggesting conditions remain too tight – it sits at 2.61 as of Friday’s close though it also sports the beginning of what appears to be a rounding bottom – nonetheless, the historical record shows the Fed always end up following the 2 year yield, always behind the curve as one would expect when PHD’S who have never had to personally balance a checkbook face off against the collective wisdome of the market
Silliness. What do you think would happen to 10- and 30-year rates if the Fed slashed the overnight to the current 2-year rate?
That said, I agree with your disdain of Fed economists.
A drop below 3.903% to test Oct 2018 high @3.467%, before breaking out.
Mish, I retired at 38 and took it upon myself to learn how to read charts, when I took a beating in 2000-1. Also, I learned about diversification, of course.
Those Chart patterns are NEVER USED ALONE. Technically, this is what we want to see, in a few words:
“Resistance becomes Support.” In market SHORTS, it is the opposite, “SUPPORT BECOMES RESISTANCE.”
In addition to that, Chart patterns, once condition one is satisfied, must be TECHNICALLY showing continued buying pressure, That will play out in Waves and not only over one week, but MONTHS of buying pressure.
I use Measured Moves to create those pattern waves. Those form the FRAMEWORK for deciding where to GET OUT (BROKEN TRADE) and getting out at TARGETS.
Look up “Dave Halsey” and the Measured Move book that he wrote. He was my mentor.
Mish has said that the technicals are used for entry and exit points.
2000$/person bribe – high demand
Supply restraint by tariff.
Leads to inflation.
Treasury yield will go up.
The check has to go through congress and at this point, I doubt congress will do it. However, as things deteriorate and the midterms approach, I think they will approve one. Probably in Sept or Oct.
Yields are up because risk is up…
As for gold? It is under pressure because December is a huge delivery month for the futures and options market. The contract settles around November 35th.
Gold is down because the prospect of a Dec. rate cut is down.
Latest gdpnow estimate: 4.0 percent — November 06, 2025
And we’re at an inflection point for inflation. The FED should kill bitcoin.
55-60% of international debt is denominated in US dollars. Dollars are a necessity and, at times, somewhat precious. After peak global equity valuation on 28-29 Oct 2025, a 28 Oct to 20/21 Nov 3/7/7/4-5 day 4-hase fractal crash is ongoing, and which, only next week, could include an Oct 1987-like event. (Not good for the 35% that still faithfully support the prevagen-less elephant party.) Commodity (i.e., gold) and crypto denominated in US dollars will similarly collapse in valuation, ultimately producing dollars to pay some of that relatively increased valuation dollar denominated debt. US Ten Year Notes will fall decidedly below 3.5%, as exiting equity et.al. money enters the US debt market.
Will the now ‘ongoing’ timely presidential-ordered new Epstein investigations into those really bad dudes, Clinton, Summers, et.al., preclude a Mike Johnson House vote on the DOJ (Department of Joke) release of the Epstein files?
Time will tell.
Speaking of Clinton, the internets are ablaze about Trump being a bi-sexual now. Evidently the “big beautiful Bill” was a secret love code paying homage to Bill Clinton from Trump. What else is in those Epstein files?
Got popcorn and a vomit bag?
Good stuff.. and by good … I mean bad…
I certainly hope that “ass” is not part of that phrase, because that is my finger-inducement to hurl. So to speak. 🙂
Trump is bi-…partisan?
Just in from the Wolf guy:
Government Sold $694 Billion of Treasuries this Week, Debt Hits $38.2 Trillion, Treasury Yields Rise Further, Shift to T-Bills Begins
Almost $700B in treasuries in one week, of which $549 was bills vs $144B in notes & bonds ($67B 3Y, $49B 10Y & only $29B in 30Y)
Here’s a salient point from Wolf:
“The $48.5 billion of 10-year Treasury notes sold at auction this week at a yield of 4.07% replace $24.1 billion of 10-year notes that were issued in November 2015 at a yield of 2.30% and mature now: The issue amount doubled, and the yield is 1.77 percentage points higher, on double the principal!“
This IS the trend. As trillions of bills & short notes mature, we’re replacing them with much higher yields, rapidly pushing up interest expense.
HOLY COW!
China is getting closer to drop the peg. The dollar will be worthless overnight, it will not be able to buy any rare earth.
Dollar worthless overnight, Please be serious.
That is downright moronic
– Gold declined today. Why? The short-term picture is the Fed may pause or slow cuts. That news should be good for long-term rates (but it wasn’t).
> Gold Advancements over the last 30 Years.
1995 – $400
2005 – $500
2015 – $1,200
2025 – $4,000
1’st 10Y Period > Saw “+ $100”
2’nd 10Y Period > Saw “+$700”
3’rd 10Y Period > Saw “+$2,800”
There is your problem. A Hyperbolic Jump in 10 Months, from $2,800 in 01/2025 to $4,100 in 11/2025. What changed?
It took nearly 30 Years to go from $400 to $4,000, but Only the Last 10 Months to go from $2,800.00 to $4,100.00
Well a lot of speculation has pushed up the price. How high is the expectation or call to unwind quickly perhaps? Gold has a history of bust cycles, with May 1980 – May 2001 the worst over the last 100 Years I believe. We shall see where this bust cycle ends up, but my thought is a massive correction, due to a massive sell off. Cash is King at the moment, and it’s quickly becoming scarce. Those with Gold will certainly consider selling, and especially at a 100 Year High!!!
Nobody really knows, and Gold could shoot up to $5,000.00 by May or earlier, but I just don’t see that occurring myself…
I agree. Cash is KING! That’s what Buffet thinks, at least. Gold is like any asset. It’s subject to big declines, once the run up loses its legs. I’d love to see what happens to markets if gold quickly lost 15-20%.
I think you will most certainly get your wish. That will be the horn sounding the alarm it’s going down. Chaos selling ensues and Gold crashes, so to speak, like it has before. The Winners being the Wealthy Speculators, who can hold, manipulate etc. and the losers are those late to the game, that can’t afford to hold, and will sell for some profit if quickly, or a loss due to having to sell.
Gold IS money. Everything else is credit. The dollar is a fiat currency backed by nothing. Put the full faith and credit of the United States in one hand, take a dump in the other, and tell me which hand fills up first.
– Gold IS money. > No, it’s a commodity, which is a product that is indistinguishable. It sells primarily based upon Price!
– Everything else is credit. > Money is Money, and backed by the Faith of The U.S. As a very wealthy Country, I would say that’s pretty good. If the currency of America goes boom, then we have a lot more to worry about than who backs it.
– The dollar is a fiat currency backed by nothing. > Actually it’s backed by America. Gold is backed by nothing but itself. A golden colored rock. It’s a commodity to invest in like Silver or Copper etc. it’s only worth what someone is willing to pay for it. In 1995 it was worth peanuts, but in 2025 it’s worth Thousands. Let’s see where it is come 2026… Maybe back to $2,500.00 from its current high perhaps? Whatever people are willing to spend for it, will decide it’s true worth, and nothing else…
It’s hilarious that people think gold is money. When the S hits the fan, gold will be near worthless.
Food, clean water, ammo, solar panels, batteries & fuel for about a year or so will be money.
What’s some Joe with 20 one-ounce gold bars going to do in this environment? And even outside of some sort of crash, you can’t pay for anything day-to-day with gold.
It’s an asset that rises & falls just like real money, but it ain’t money.
– It’s hilarious that people think gold is money. > in the 18th century Gold & Silver were considered “Legal Tender” and Accepted by Governments for Taxes. With the Metal Coin being produced, and most with Gold, Silver, and Copper, with Bronze a very small factor, Coins Themselves became the actual store of value. Things have certainly changed…
– As you suggest, “Food, clean water, ammo, solar panels, batteries & fuel for about a year or so will be money”. > While I agree with your staples to exist, and that’s “Food, and Clean Water” to be certain, depending on your age, circumstances, location etc. ammo could be useless depending on why specifically required. Solar Panels depend on location, and why, Fuel as in liquid, could be way too heavy, and propane tanks as well. Maybe matches, lighters, flints, and a compass if needing those too. I hope it doesn’t get like that, but regardless Gold would be useless due to weight alone, paper too perhaps, but you could burn it at least.
All sorts of things to potentially consider… Heck, The Euro & Dollar represent over 70% of The Worlds Currency Trading Today, but on a tangent now!!
Gold peak in 1980 was $677. Using the BLS inflation adjustment calculator shows that the nominal value on gold based on simple inflation adjustment from that point should be $2836. If gold “crashes” this should be the floor but it can certainly drop below that for any reason at any time.
I have read that China is hoarding gold and convincing Asian nations to store their gold in their vaults creating an alternative to New York/London.
Clinton and Trump are also packing fudge. HOARDING. YUCK.
I agree and used 1995 @ $400.00 and $2,500.00, so similar frame of mind…
Volcker never tightened monetary policy, except for Feb, Mar, Apr, of 1980 or the Emergency Credit Control Program (he let it burn itself out). He let legal reserve rise by 17 percent after the DIDMCA
I look a the level of payments to roll on the debt to determine the price of gold.It’s going up parabolic.
Many wish for you and many others to believe just that!!
Out of curiosity, how will Gold go parabolic, when it’s being sold? It’s in that state now, and has been for a bit. The next historical step, is for a fall, and long lasting as they can go. Look at 75, 80, 88 as examples. Am I missing something?
Asians disagree,central banks too,they have absolutely no interest for gold to fall down now that they have stacked.Plus gold paper is 300 times physical gold:central banks buy physical only.
For those who bought gold in 2008,what do you think did hapen?Fiat money creation all the time.
– Asians disagree,central banks too,they have absolutely no interest for gold to fall down now that they have stacked.
> Well that’s the issue with Gold, its price can fluctuate greatly, and therefore leave many with nothing to very little. If you bought in the last year high, and it goes back down like I suspect, you will be holding a lot of Gold at a Loss if sold then. If you can, hold it until it reverses course again, as it does always. And get your money back.
– For those who bought gold in 2008,what do you think did hapen?Fiat money creation all the time.
> They Made a whole lot of money on the Gold Rock!! It was ONLY $923.75 in 01/2008, and climbed to over $4,000.00!!
>> What will they say about those that bought in 11/2025? When It was at $4,083.35! In Say 11/2026? We will soon find out, but I wouldn’t want to be on the Hold Side of things then…
Gold went up because the distributed lag effect of long-term money flows. It’s now at an inflection point.
No argument? More like this
ME -flow5 (2/26/07; 14:34:35MT – usagold.com msg#: 152672)
Suckers Rally. If gold doesn’t fall, then there’s a new paradigm
The seeds were sown quite a while ago and now we will see this monster grow. Stagflation will be severe. I base that not on today but the what the government will release to fight those deflationary forces you mention. It will be spectacular!
The technicals are muddy. Yeah it is sort of a flag formation but without a good flagpole. And it has broken several short term trend lines. We have had positions in the futures now since the 2022 price low when CPI turned. Used to be mostly long futures. Now positions long and short mix in 2s, 5s, 10s and 30s. With options sold on the outskirts so short calls and puts depending on the position at each tenor.
It is the fundamentals now that are also highly mixed. Jobs will only crash if there is a recession or AI has finally started to consume jobs.BUT, we are approaching the sovereign debt crisis here and everywhere AND the admin is reconfiguring how the monetary system works in ways no one can really predict, and this means probabilities of huge moves either way have risen and those are also impossible to predict. It is not like it was pre-2010. Nothing is.
The longer tenors are just sort of sitting around waiting to see what happens. The Fed is mostly irrelevant. Although doing away with the Eurodollar Libor system and replacing it with SOFR or domesticating dollars to some degree is largely their redoubt.
The future is now HIGHLY uncertain as we head into the apex of the 4th turning, and into Martin Armstrongs predictions of HUGE political/socio/economic changes between now and 2032, so the next 6-7 years
interesting stuff. The makings of some type of 4th turning is happening. AI appears to have accelerated wealth disparity and the election on socialist politicians seems like the path many disenfranchised citizens are choosing to use as a way out of the two party system that has no fiscal prudence and is failing them. Cryptos are the other choice of these disenfranchised but I am thinking it will not be long before the CBs and big banks force everyone to adopt their cryptos.
Congrats to those who made a killing in $Melania meme coin a few days ago when it skyrocketed to 22 cents.
Where to put those gains? Bitcoin is on sale. Only $95,000.
I’ve also done some hurst cycle analysis on Bitcoin too.
The long term is the major peaks are consistently separated by 4 years. Same with the cycle bottoms. So there is a good chance the 4 year peak arrived in October 2025. The price has broken the lower support trend line from the late 2022 lows.
Shorter term, the dominant 10 and 30 week cycles are in range for their lows. So the next move is a fairly short term trade higher ( target no more than $110K) for Bitcoin in the context of a stronger year long bear market. I would consider going long when the 4 year cycle bottoms, which is November-December 2026.
I tend to believe the fed only pretends to adhere to the full employment and stable prices objectives when it is in the interest of their owner banks. Point in fact, how stable have prices been since gold’s last tie to the dollar was removed temporarily by Nixon’ 1971 executive order? Not so stable I would submit as that was the Fed’s last disciplinary restraint. That being the case, I expect the Fed to flood the system, using employment problems as the rational, with unbacked currency to try (probably unsuccessfully) to maintain demand abandoning all pretense for stable prices. That will mean much more money chasing potentially a smaller basket of goods and services. After all, there is no penalty for the fed’s failure to meet or even attempt to meet its objectives.
As you point out, the Feral Reverse has not done its job long term. More recently they have lowered rates (4-5 times) instead of raising rates to get inflation under control as Volker did. The days and weeks following those cuts, the bond market sold off. Why would the Fed do something so obviously wrong?
After I finished writing my technical analysis comment it occurred to me the real reason Fed dropped short term rates may have been to try to pull long term rates lower in order to sell the long end of its portfolio at a minimum loss. If the Fed can sell enough of its portfolio now, it will have more ammunition to buy bonds at higher yields when the bond market and economy really need help.
Volcker’s reign is a myth, like a lot of economic theories. Volcker was as dumb as a rock. Monetarism involves controlling total reserves, not non-borrowed reserves as Paul Volcker found out. Volcker targeted non-borrowed reserves (@$18.174b 4/1/1980) when total reserves were (@$44.88b).
“I tend to believe the fed only pretends to adhere to the full employment and stable prices objectives when it is in the interest of their owner banks. “
Very close. The Fed does what it wants and makes up excuses to do it. That’s easy because of dual mandate. They focus on jobs and “inflation expectations” not inflation.
That pair let’s them do whatever the hell they want. “Inflation expectations are well anchored” How many times have we heard that BS?
The Great Inflation was due to the monetization of time deposits period.
The past few days have increased my confidence in elliott wave and hurst cycle analysis. The top in the 10 (not shown) and 30 year US bond yields were in October 2023.
Since then I count a flat correction in the 30 yr bond. The 10 year bond shows a zigzag or double zigzag correct, both interpretations lead to the same conclusion. The most telling aspect of both 10 and 30 yr bonds is an ending diagonal (starting around June 2025) in the final motive position down. Ending diagonals are followed by very sharp reversals.
On the Hurst Cycle analysis side. The nominal 48 month cycle out of the 2020 lows completed in September 2024. Since then two 6.5 month long cycle completed, as well as the first 13 month cycle out of the new 48 month cycle. The start of the second 13 month cycle has broken the resistance line from the peaks of the previous 3 five week cycles, which confirms the end of the 1st 13 month cycle. The muted retracement of the 48 month cycle implies a much stronger long term cycle at play. Longer term, the 60 year cycle bottomed in 2020 and is expected to go generally hockey stick into the ~2040 peak.
Having high confidence with a single technical analysis tool is one thing, but to have two tools (temporal and structural) using two different maturities of bonds leading to the same forecast is quite another.
One cheap quibble. I would say the Fed is “flying blind” even when it’s awash in data.
And personally, I can’t see why there are buyers of 30-year Treasury paper at any imaginable yield–though I suppose the pros can hedge. But what would the carrying value be if another Volcker moment came along? (“Oh, the bid don’t matter, we’re holding to maturity”?)
Fed does not have CPI or PCE Data. There are no other good sources (not that BLS is good)
There’s not going to be a Volcker moment coming soon, not due to inflation. Mish is right. The jobs situation is deteriorating quickly.
I believe long-term rates are moving higher because the Fed on 12/1 will start redirecting at least $20-30B a month from treasuries & MBS runoff into short-term treasuries. Then the Fed will start up regular QE by early next year.
I agree. I don’t see much demand for long-yields going forward. To me, this means the bond market thinks we’re closer to the Fed losing control over the long-term part of the curve.
2026 is going to be a very interesting year for a variety of reasons.
The rate-of-change in short-term money flows, the volume and velocity of money, the proxy for R-gDp, is now decelerating going into the 1st quarter of 2026.
FED does’nt need any numbers:it’s supporting the markets.You cant afford having all the retired people without revenues,and all these leveraged people to go down.Markets must grow at any price!