The bond market is getting a lot of attention lately — and for good reason. In early October, the 30-year U.S. Treasury yield briefly hit 5.73%, while the 10-year yield reached 5.36% — both their highest levels in 24 years. And the average 30-year fixed mortgage rate climbed to 7.40%!
And NOW so-called experts are getting around to asking “Will bonds blow up?” Thanks for nothing, Captains Obvious.
Wouldn’t it have been nice to see the risk coming before the bond market’s years-long decline?
Seven years ago, our Elliott Wave Theorist warned about the sea change ahead:
Then, in our April 2020 Financial Forecast, with U.S. Treasury Long Bond futures just off their peak at 191-22, we showed a complete five-wave rally and said, “If we are right and prices fall, rates will rise, producing a nightmare for the government.”
Six years later, the government’s finances are indeed a nightmare (the national debt has hit $40 trillion, and just the interest alone on the debt is larger than the entire U.S. military budget!) Tens of thousands of homeowners with adjustable-rate mortgages are facing resets at higher rates, adding hundreds, and in some cases, thousands of dollars to their monthly payments. And higher borrowing costs are creating a severe affordability crunch for U.S. households.
We knew better than to wait for the “Follow the Fed” conventional wisdom crowd to ask whether bonds were in trouble. We instead prepared our subscribers for the sea change before it unfolded. Some put money in FRNs. Some locked in FIXED-rate mortgages in the 3% range. Some sold off bond portfolios. ALL of those were GREAT decisions.
So, which publication would you rather have been reading?
The stakes are clear. Subscribe to our Flagship Services to see our complete outlook for bonds and interest rates now.
Or, read the latest issue of our Financial Forecast for a quick snapshot.
