My analysis of the bond market has been bearish since August 2020. I have repeatedly written that every rally was a gift, an opportunity to bondholders to GTFO. The recent rally has been no different than those which preceded it in that regard.
Yesterday it seems to have made the turn for the next upleg in yields. The 10 year Treasury yield bounced hard off of its 100 day MA, after making a slightly higher low than the May low.
Meanwhile the Fed is, as usual, massively behind the curve. Not just behind the inflation curve, but massively behind the curve in its ratification of market interest rates every 6 weeks.
The Fed worries about its inflation fighting credibility. It has no credibility. The evidence shows that consumers are already spending like there’s no tomorrow, in their efforts to stay ahead of inflation. Unfortunately, they are right. There is no tomorrow. Might as well enjoy today and buy that air conditioner now, rather than waiting for that end of summer sale.
Liquidity Trader- Money Trends
How Fed and Treasury policy, Primary Dealers, real time Federal tax collections, foreign central banks, US banking system, and other factors that affect market liquidity, interact to drive the financial markets. Focus on trend direction of US bonds and stocks. Resulting market strategy and tactical ideas. 4-5 in depth reports each month. Click here to subscribe. 90 day risk free trial!
Join the conversation and have a little fun at Capitalstool.com. If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.