As the Federal Reserve continues to fight inflation by raising interest rates, the market is growing uncertain about futures rate hikes.

Today, we share a chart comparing the 10-year US treasury bond yield versus the popular 20+ year treasury bond ETF.

As you can see, both yields and bond prices have formed narrowing patterns… and both of these patterns are nearing completion.

If bond yields (blue) break down and bond prices (orange) breakout higher, we could see some mean reversion which would lead to lower interest rates. But if the patterns break the other way, it may mean higher interest rates.

Either way, something “BIG” is about to happen. Follow the breakouts or breakdowns!!! 

(Click on image to enlarge)

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