The Fed and the Treasury are actually coordinating with each other
The one-way upward and downward moves in U.S. Treasury yields have both been interrupted; the gatekeepers are the Federal Reserve and the Treasury, until a new external variable emerges.
The Fed’s goal is to fight inflation, which requires raising short-term interest rates.
The Treasury’s goal is to lower borrowing costs, which requires suppressing long-term interest rates.
The 30-year U.S. Treasury yield forcibly broke through 5.25% and approached 5.337% due to unexpected macro data, which means the Treasury’s rhetoric has failed and the gatekeeper has been breached. Once triggered, reduce positions immediately, because the market theme will instantly switch back to a liquidation mode of tight liquidity.
To simplify this game: 5.25% is the bulls’ alarm bell, and 5.15% is the bulls’ charge signal.
The one-way upward and downward moves in U.S. Treasury yields have both been interrupted; the gatekeepers are the Federal Reserve and the Treasury, until a new external variable emerges.
The Fed’s goal is to fight inflation, which requires raising short-term interest rates.
The Treasury’s goal is to lower borrowing costs, which requires suppressing long-term interest rates.
The 30-year U.S. Treasury yield forcibly broke through 5.25% and approached 5.337% due to unexpected macro data, which means the Treasury’s rhetoric has failed and the gatekeeper has been breached. Once triggered, reduce positions immediately, because the market theme will instantly switch back to a liquidation mode of tight liquidity.
To simplify this game: 5.25% is the bulls’ alarm bell, and 5.15% is the bulls’ charge signal.