Can we chart out where interest rates will peak, and when?
Updated
I found this pretty interesting, as I didn't think there'd be any trend line at all when the idea to chart the 10 Year bond yield long term popped into my skull. Well, I'll be damned! It's all purty-like! I'm a CMT, not an economist, so I don't know if this holds any validity whatsoever... but 2.5% by around June 2023 sounds plausible. If nothing else, I think of the chart as a way to get people to CALM DOWN about the Fed and their rate hikes. It's not a big deal folks, and yes, it's happened before... and before that... and before that. And we survived!
If anything is disconcerting about this chart it's that it isn't sustainable. Interest rates can and should stay above a certain threshold and we're nearing the point where the Fed's primary weapon of choice to fight economic disasters (lowering rates) won't work. The Fed has known this for some time I'm sure, which is why Quantitative Easing came into existence.
Moral of the story? Don't sell every stock you own just because the Fed says it's going to raise rates a bit. We act like lemmings throwing ourselves off a cliff at the hint of the Fed raising rates a quarter point. Look at the historical numbers and realize how miniscule this really is in the big picture of things. Seriously, we act like a bunch of lunatics! Last month when the Minutes report came out 3 weeks after the FOMC meeting what happened?
We panicked!
At words that were said 3 weeks earlier, no less!
Do yourself a favor and unless you're a hardcore day trader don't spend too much time on the low intraday time frames like 1-15 mins. You'll get whipsawed into oblivion as you become a plaything for the algorithms to tear up. Zoom out a bit. Take a breath. You'll sleep better!
If anything is disconcerting about this chart it's that it isn't sustainable. Interest rates can and should stay above a certain threshold and we're nearing the point where the Fed's primary weapon of choice to fight economic disasters (lowering rates) won't work. The Fed has known this for some time I'm sure, which is why Quantitative Easing came into existence.
Moral of the story? Don't sell every stock you own just because the Fed says it's going to raise rates a bit. We act like lemmings throwing ourselves off a cliff at the hint of the Fed raising rates a quarter point. Look at the historical numbers and realize how miniscule this really is in the big picture of things. Seriously, we act like a bunch of lunatics! Last month when the Minutes report came out 3 weeks after the FOMC meeting what happened?
We panicked!
At words that were said 3 weeks earlier, no less!
Do yourself a favor and unless you're a hardcore day trader don't spend too much time on the low intraday time frames like 1-15 mins. You'll get whipsawed into oblivion as you become a plaything for the algorithms to tear up. Zoom out a bit. Take a breath. You'll sleep better!
Note
Well, it was a novel idea, I suppose. But it was way freakin' off! Apparently interest rates aren't governed by chart patterns.... imagine that!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.