Interest Rates Could Be Bottoming After 35% Decline
Chris Kimble | Jun 21, 2019 01:43PM ET
Are interest rates near a short-term low? It's possible.
This chart looks at the yield on the 10-year note over the past 15 years. The lower part of the chart measures the 35-week performance of TNX.
Five different times over the past 10 years, yields have declined around 35% in 35 weeks at each (1). Yields were closer to short-term lows than highs when this large of a decline took place at each (1).
Yields are now testing 2017 lows at this point, a following a 35% decline in the past 35 weeks. Over the past 10 years, yields were closer to short-term lows when these conditions were in play.
A very important support test is currently in play at the 2% level. If this support fails to hold after such a large decline, bonds are suggesting the odds of an economic slowdown is high.
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