30-Year US Gov't Bond Yields since 1977
Updated
Here is a long term view of long term US Gov't interest rates. Long term is defined as 30 years and is a common bond owned by pension funds and insurance companies and other long term investors with long term obligations.
I highlight the various ranges of interest rates as shown in these 4 boxes and the few moves that temporarily moved interest rates outside those boxes:
1. 1987 Stock Market Crash on collapsing USDollar, hiked capital gains taxes starting in 1988, trade wars with Germany, S&L crisis brewing from 1986 real estate tax law change, and Congressional moves to eliminate interest rate deductions on takeovers.
2. Orange County Bankruptcy
3. Great Financial Crisis "GFC" - massive deleveraging of the banking industry forcing asset prices down in a collapse.
4. Covid reaction by Gov't to shut economy down and stimulate spending and handouts to keep economy afloat
5. Current over-reaction to over-stimulation during lockdowns and supply chain issues.
I highlight the various ranges of interest rates as shown in these 4 boxes and the few moves that temporarily moved interest rates outside those boxes:
1. 1987 Stock Market Crash on collapsing USDollar, hiked capital gains taxes starting in 1988, trade wars with Germany, S&L crisis brewing from 1986 real estate tax law change, and Congressional moves to eliminate interest rate deductions on takeovers.
2. Orange County Bankruptcy
3. Great Financial Crisis "GFC" - massive deleveraging of the banking industry forcing asset prices down in a collapse.
4. Covid reaction by Gov't to shut economy down and stimulate spending and handouts to keep economy afloat
5. Current over-reaction to over-stimulation during lockdowns and supply chain issues.
Note
Yields right into the heart of the 9-year sideways (2003-2011's) range of interest rates, a massive consolidation area and very likely to be resisted at these levels. The level of interest rates has severely curtailed long term borrowing demand and reduced demand for cars, houses and even solar-panel systems. The overall economy is flat and running on fumes of demand. Time will tell.
October 18, 2023 10:14AM EST 4.987 last
TYXNote
So far, the range and movement of TYX is right on track to what I had laid out here back in October of 2023 at a time when there was panic about rising interest rates. Expect more choppy sideways action from here to continue the guess.January 19, 2024
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