Chart Of The Day: Interest Rates Rising Once Again
Tiho Brkan | May 12, 2015 05:03AM ET
Today's chart of the day focuses on US interest rates and the bond yield curve. At the beginning of 2014, longer maturity bonds were oversold and market participants were positioned heavily on the short side, expecting prices to drop even further and yields to rise as the Fed ended the QE program and potentially started raising rates.h3 Chart Of The Day: Global interest rates have once again started to rise /h3
Well, that didn't really work out for the shorts. Instead, one of the strongest rallies in the bond market developed throughout 2014, where the U.S. 30-Year Yield dropped from 3.96% in December of 2013, all the way down to 2.25% in January of 2015. As we can clearly see in the chart above, the yield curved flattened across the board from 2s10s all the way to 10s30s.
Moreover, while the 30-Year Yield made a new low, none of the other maturities confirmed this move. The lowest low for the U.S. 10-Year Yield seems to be holding at 1.43% back in July 2012.
Now it seems that inflection point has occurred once again and in recent weeks, bonds all across the world have been selling off hard. In other words, interest rates are starting to rise again.
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