10-Year Treasury Yield Predictions

[2:50] It is pointing to potentially 6 and 1 half yield as the first level all the way up to 8% which uh will wreak havoc, right, and create a financial crisis, a global financial crisis most likely.

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[2:27] I believe we are making a major bottom in in the bond market here. major top in rates. Uh I focus on 10 year. Third year's gone obviously broken out and gone above uh levels and and people are projecting higher. I'm not so worried about the 30-year. What really matters what what loans get priced off of, mortgages get priced off of is the 10-year. We keep bumping up against the kind of 530 535 536 level.

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[20:43] I think in my mind that puts somewhat of a cap on long end 10 year let's call it 5.5 just because it's a nice round psychological number.

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[23:19] I just think it's going to it's going to work its way higher. And the issue that we haven't seen yet... the least resistance still to me in interest rates is up, not down.

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[7:14] I think we're going to see a good shot at 6% before year-end. You know, we talked in the summer. I said we get 5% by September and I think we have a real good shot to get to 6% because there's A of demand for money and you're you're you're pushing it out and you've got all these deals out there which is going to raise the cost of money and the cost of interest rates.

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[3:41] So, I think in the near term, we're basically there. I am expecting a pullback that's going to be at least bringing us back below 5%.

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[10:52] my intuition tells me that we may go back down to 5%, maybe even breach below 5%. And then go right back up again. And the reason is is because we are in a higher for longer I think inflationary environment

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[3:16] the tenure historically um during a rate height cycle rises at least 100 basis points. That's on average. you know, 50 basis points at the low end and 200 plus basis points at the high end through historical rate cycle. So that tells you this this cycle started with the Fed the 10-year rate at 5%. So on average it would it would probably go to six, but I think you could argue that you know it could go to six and a half, seven

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[3:10] I'm not going to be, you know, smart enough to say 525 is the high. Uh, but we're getting close enough that I would and actually am starting to look towards getting long the bond market. And I've been short the market and been badmouthing bonds since 2020. And now at these levels, I'm actually kind of coming around to that there's some real value there.

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[8:33] there's a lot more upside in the 10-year yield, by the way, and the 2-year yield.

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[24:24] rates go down to maybe three on the 10-year in the next year or two. So there's a really good in in our opinion opportunity to buy high quality bonds here and then trade out of them in the next couple years.

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[7:58] It wouldn't surprise me if the 10 year is at six. Right now, we're at five.

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[6:06] So the question is, you know, 5% is the level where the US tenure has tended to peak out and then come back down. Do you think this time we go past five? I think it's possible um in the in the near term.

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[12:11] How about 6% or above? That's where I'm at. I think we're going to see 6%... But I think it's got a chance by the end of the year. It's a big move... I certainly will be buying those bond futures at 6% by the end of the year

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[40:25] You said maybe another 50 basis points into what you would call the red zone for the economy. Uh are you still sticking with that assessment or or outlook after what the Fed did yesterday? >> Yes.

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[3:51] I could argue here that we could see rates fall if the Fed raises rates... the long end could fall is because you have a loss of confidence in people buying our debt... I could see this 5% as being a pullback level on the 10-year yield.

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[28:29] I think the play here is to be long bonds expecting rates to come in and oil to come in.

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[23:32] I think bonds are going to make up a lot of lost ground in the next few months.

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[30:29] Now, people won't be talking about five anymore like 1 to 3 months from now.

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[30:21] if you go down 20 basis points down to 480, it's going to freak out all the shorts. Yeah, they'll be forced to cover. Next thing you know, we'll be at four and a half.

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[31:17] at 5% you're going to see very very clear restraining uh impact on the uh economic activity and as well on small businesses and eventually on the labor market.

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[0:07] I do think that 10-year bond yields at 5%. Is potentially a line in the sand for both the economy, the stock market, and definitely the Treasury, and possibly the Fed. We're pretty close to 5% at this point. In the short run, that may be our maximum upside in yield.

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[42:56] you and Lance still think that secular lower bond yields lie ahead over the next couple years. Um, first off, I'll take a beat. True. >> Yes.

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[30:14] high oil prices is bearish for US debt. Um because if the US debt, the treasuries, treasury bonds and bills are reserve assets and they are still, you know, um uh alongside gold, the largest things people buy with their extra money. And when you have extra money and you need energy, you happily trade that money for energy... people sell treasuries to buy oil

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[19:33] every time, go back in history, every time we've got to around 5%. They've come in and they've intervene and they've intervened and try to get it back down again. And so I think that we you see this this pattern over here that's exactly the pattern that we're going to get. How we going to get the pattern? They're going to put more money into circulation because they're going to buy back their own T bills.

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[14:33] I I'd have to think if there's a magical number and just a number, it would be it would be 5%. And uh we're getting there pretty quickly.

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[4:33] I I think there could be another 50 basis point increase in the 10 10 year and 30 years. So that that puts us really into a red zone shall we say.

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[25:49] Yes. What happens to the economy once we hit 5%? By the way, I've heard a theory... 34% chance above 5%. Do these uh numbers more or less line up with the direction you're anticipating? Yes.

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[17:17] When we think about the 10-year Treasury, for example, we think it's probably going to hold uh in this four and a quarter to four and three/4er percent range. We're kind of at the high end of that range right now. Uh if the Fed hikes or it looks like they're going to hike, maybe there's some upside, but we think 5%'s probably kind of the cap there

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[3:43] I would not be surprised within the next 6 weeks if we hit over 5% in the 10-year notes because of this intervention.

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[18:06] It could easily hit 5%. You know, could be for 20 minutes, it could be for 20 days.

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[13:08] Going to see a steeper yield curve for quite a period. I think it's going to be difficult to get 10 years below four and a half%. I don't think they go crazy above 5%. So, I think 10 years to me are fairly rangebound, four and a half to 5%. Unless something changes in the economy.

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[3:03] I think we've hit a a temporary peak in the 10-year yield. And you know, the 10-year yield is inversely correlated with speculative names. It's also inversely correlated with tech stocks. And as a result, um now that the market um you know, tends to feel that the 10-year um has peaked which has been my view for the last few weeks although we finally got it now.

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[29:07] we're still about 100 110 basis points below uh uh the long run mean of term premia prior to the GFC. So if you just added that back to the bond the 10-year Treasury yield, we'd be 5.7% right now. That's fair value for 10-year treasuries.

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[4:02] there are a lot of those kind of technical indicators that have suggested that the tenure yield is too low is going to break out to the upside for quite some time now.

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[22:08] I think that the 10-years are going to see close to 6% before the year's over.

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[3:52] I expect to see the tenure notes get upwards north of 6% maybe this year.

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[24:00] I think short-term meaning months to a year or two, rates can work higher and even test or get above 5% on the 10-year.

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[18:17] I sold the 10-year notes at at 114. They're down to 109 or 108 now. So, that's a pretty big move and I expect them to go even lower.

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[32:10] I don't expect it to go much higher. And I think again with the economy potentially weakening later this year, it's very likely we could start heading down on yields over the next, let's say, 3 to 6 months.

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[23:11] I I I I mean I still think we inevitably retest 5%. Which is where we we got to in the in 2023.

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[16:06] We think normal GDP growth is likely set for a clip of between 6-7% going forward. Maybe a tad higher than that, but you know, the economy is on a roll at the moment and inflation clearly is a nagging problem. But that is going to mean that you're looking at something like a target of about 6% on the long on the long bond or the 10-year on the 10-year bond.

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[4:27] I think that'll help with the tenure. I think the 10year's peaked.

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[6:03] bonds are getting ready for another breakdown, meaning another move up in rates, I think that's coming. And so maybe we get the 10ear to break away from 4 and a.5% and then move up towards 5%

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[3:19] I think that we're probably going to see the 10-year yield, which is around a little under 450 right now, around 442 or so. It's probably going to trend towards 5%, I think, by the end of the year.

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[31:12] I think the 10year notes are going to 6% before the year. Okay. So, again, I think interest rates are going a lot higher.

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[37:29] The 10-year yield should go to could go to 6% over the next 6 to 12 months.

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[26:23] I don't see the 10-year Treasury coming down, not meaningfully, and some of that is the negatives of inflation and debt deficit financing it, but some of it is also just good economic growth.

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[32:39] I think you'll see we'll we'll be back at 4% pretty quick on the quickly on the 10-year. And I'm I'm saying we could be at 3% or below by the end of the year.

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[39:52] I expect the the 10 year to drop to zero the 30-year to drop to a quarter to a half percent.

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[14:53] 5% on the 10-year the 10year gets above 5% and the market hasn't at least corrected hard then don't don't ever listen to Peter Granwich again

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[30:29] The 10-year Treasury yield 4.3%. Uh, what's more likely? 4% or 5%. 3.9.

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[4:42] Watch the 10-year Treasury. We believe the 10-year Treasury is going to be is settling in in this 350 to 450 range and that's been our call now for a couple years. We think that's going to continue for the next 2 to 3 years.

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[6:56] it wouldn't surprise me if you see yields north of 5% um or more.

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[16:05] I think we're going to head towards that 10 note yield in China which is 1.85%. Currently in US is about 4.15%.

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[20:19] Yeah, but you could break 5% for a moment in time. Sure. Could be a panic.

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[15:11] I think on that basis and they've they've anticipated 30 to 70 basis points reduction in the 10-year yield once that's implemented that should be implemented sometime late this summer. uh that would bring the 10-year yield down to 350, 370

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[5:36] The 10 year and 30-year, I think they'll punch through 5%. That's my expectation, but not maybe by the end of the summer.

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[30:37] I would be a buyer of bonds, meaning I think yields are going to go lower... this is resistance, and it's going to reject price and price is going to fall. And in this case, it's the 10-year yield.

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[32:15] So I think 3.75% is a gimme. I think we're going to blow below that in the next 12 months. I wouldn't be surprised if we get into call it a a three to three and a half% range between now and this point next year.

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[21:09] eventually, this is my target on the 10-year yield. That's at 3.47, 3.45% on the 10 years.

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[22:26] I think you'll have one more turn in here where the where that 10year will go below four or somewhere in there

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