What does the fact that the U.S. Federal Reserve said it would stand pat – for now – on American T-Bill interest rates mean for the bond market going forward?
The chart above looks at the yield on the 10-year note over the past 20 years and without a doubt, the long-term trend of lower highs remained in play just after the Fed made its call.
Rates have declined over 35% since hitting 20-year falling resistance back in October of 2018.
That decline has rates testing rising channel support and the 2017 lows this week at (1). While dual support is being tested, weekly momentum is hitting the lowest level in the past 8 years.
If the Fed had lowered interest rates, it may have meant that rates were actually ahead of the central bank and that would have put them near short-term lows.
Still, keep a close eye on what yields do this week as they could send a very important price message about where rates are headed in the short-term.
Stay tuned.
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