Inflation Fears Nowhere to be Found in Long Term Treasuries

The yield on the 30-year long bond peaked at 2.45% on March 18, 2021. Now it's 1.88%.

Charts in this article are as of the market close last Friday.

March 18, 2021 Yields

• 30-Year: 2.45%
• 10-Year: 1.71%
• 5-Year: 0.86%
• 2-Year: 0.16%
• 1-Year: 0.08%

November 5, 2021 Yields

• 30-Year: 1.88%
• 10-Year: 1.44%
• 5-Year: 1.06%
• 2-Year: 0.40%
• 1-Year: 0.15%

March 18 to November 25 Yield Change

• 30-Year: -57 Basis Points
• 20-Year: -47 Basis Points
• 10-Year: -27 Basis Points
• 7-Year: -4 Basis Points
• 5-Year: +20 Basis Points
• 3-Year: +32 Basis Points
• 2-Year: +24 Basis Points
• 1-Year: +7 Basis Points

Treasuries Most Sensitive to Rate Hiked

US Treasuries between 2 and 5 years in duration have been the most sensitive to rate hikes.

The 3-year treasury note seems to be the most sensitive at the moment to expected hikes.

Inflation Fears? 

If there is a big wave of inflation yet to come, it's sure not evident in long-dated treasuries 7-years or longer where yields have fallen since March.

What's the Message?

The Fed is going to hike the US economy into a recession.

I don't believe in autopilot for a year and neither does the bond market. Perhaps some do, and then some.

I took the other side of that idea.

The Fed Announces an Autopilot Strategy: How Long Can It Stick With It?https://t.co/F23p1eIq5X

— Mike "Mish" Shedlock (@MishGEA) November 5, 2021

The Fed Announces an Autopilot Strategy: How Long Can It Stick With It?

For discussion, please see The Fed Announces an Autopilot Strategy: How Long Can It Stick With It?