Is the Fed losing control over interest rates? I’ve heard a rumor that the Fed is in control of interest rates.
If this is true, is Janet raising rates and not telling anyone? The table below looks at the performance of the yields on the 10 & 30-year notes and TLT over the past 90-days. As you can see yields are up nearly 20% in 90 days!
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If Janet and the Fed aren’t raising rates right now, is it possible that “Billions of Free Thinking People” are causing rates to move higher?
The chart below takes a look at the yield on the bell weather 30-year bond over the past decade. As you can see, yields have pretty much stayed within a sideways trading channel since 2008. At (1) in the chart below, the yield on the 30-year bond recently broke above its 200 day moving average and is attempting to break above falling resistance.
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The yield on the 10-year note is attempting to break above its 200 Day EMA and falling resistance at the same time at (1) below.
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In January of this year, I shared “10 Reasons Rates are about to rise,” before this 20% rally in yields took place. (See Post Here)
A yield breakout above falling resistance and above 200EMA lines should be respected and would suggest that the rally in rates is not over at this time.
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Market-lore has it that the Fed only influences (the word “control” should not be used) short-term interest rates such as the 2/5/10YR Bond yields and the 20/30YR yields are influenced by yes the billions of free-thinking, however Billions of dollars controlled by very few free-thinking Money Managers (i.e. PIMCO, Large Banks, Soverign Funds, and Large Retirement Funds) that control billions of dollars.