In the department of give us this day, our daily bread, here’s an update on the current short term projection for the 10 year Treasury yield.
1.80
Which of course means that bond prices will fall another couple percent, resulting in more collateral calls from repo lenders. Death by a thousand cuts (in price) for dealers.
Now we can readily see that 1.60 is resistance. If they clear that, then 1.80 is a piece of cake. If they don’t clear it, it will consolidate for a while. Maybe even pull back. But the Law of Supply says that price will ultimately fall, with the mirror being yield rises.
And as we know, that while everyone looks in the mirror, the yield that everyone sees and is focused on is not the problem. Price is the problem.
