The direction of long-term interest rates has a huge impact on many other financial markets and asset classes. After last week’s rate rally the 10-year US Treasury Note yield is attempting to break-out above a 23-month downtrend:
10-year US Treasury Yield
This breakout targets a move up to at least the December 2013 high yields near 3%. In addition, there are much larger patterns and time frames in play here; the July 2012 all-time low 10-year yield of 1.39% is looking more and more like the end of the 30+ year Treasury Bond bull market.
If we are in the midst of a bond bear market it could have far reaching implications on other asset classes such as real estate, equities, precious metals, etc. Bond king Bill Gross believes that we are indeed in the midst of a rising rate environment and he is actually short the 30-year Treasury Bond: