10-Year Yields May Never See 8% In Our Generation Again

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

Otherwise, enjoy the column!

Subscribe to the Monster Stock Market Commentary to get the Weekly Monster Market Commentary and join the 3,072 subscribers getting it for FREE!

Follow @michaelmottcm

This Daily Commentary Is Availabe For $99 Per Year, Sign Up!

We touched on yields a few weeks back but never finished our discussion. A generation has grown up thinking and believing that yields have to rise because rates today are too low. Well, what if they aren’t too low, but they are just back within a normal range on the long end of the curve? Is it possible?

UK Consol

This is one of my favorite charts, UK Consol, showing interest rates going back to the year 1703! Which period looks out of whack here?

If you said the mid-1970’s to mid-1980’s, you are correct. It is surprising that from 1703 until say 1960, yields on the console broke 5 percent three times! Notice how 2016, the very last datapoint is not that far off previous levels throughout time.

10-Year Treasury Rates

Then, of course, we can move to the present and our 10-year treasury rates.

Lower Yields

Subscribe to the MCM Stock Market Commentary to get it weekly and join the 3,072 subscribers getting it for FREE!

Despite the recent move higher in yields, they are a long way from having a meaningful breakout higher. In fact, it is likely we see yields move lower in the short-term testing our red trend-line, before any move higher again. The two black lines represent a very long-term channel that will likely not easily be broken. Meaning that overall yields are likely to continue to move lower before they move higher in the long run.

Just something to consider and think about.