Treasury Bond Massacre, Mortgage Rates Hit 5.35%, Highest since 2009, and it’s Only April, by Wolf Richter

At the current rate of general price increases, the bond market has a lot more to drop before interest rates offer a real rate of return. From Wolf Richter at wolfstreet.com:

But future bond buyers get the higher yields.

Treasury Bond Massacre, Mortgage Rates Hit 5.35%, Highest since 2009, and it’s Only April

But future bond buyers get the higher yields.

By Wolf Richter for WOLF STREET.

The interesting thing is that no one at the Fed is trying to talk down those spikes in Treasury yields and mortgage rates. It shows that those yields are going where the Fed wants them to go, and that the Treasury market is coming around to the Fed’s rate-hike plan, and that those yields have a long ways to go, given that CPI inflation is 8.5%, a gigantic mess that has unfolded over the past 15 months, finally, after 12 years of money-printing.

The two-year Treasury yield spiked by 15 basis points today to 2.61%, the highest since January 2019. This has been a huge move in just seven months. When the two-year yield goes over 2.83%, it will be in territory not seen since 2007, as the Treasury market begins to price in the Fed’s coming policy action to crack down on inflation:

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