WATCH YIELDS PART 101

WATCH YIELDS PART 101. Seems like this is the 101st time we have stated to you to just watch yields. We were in hopes the past couple of weeks of action had yields trying to put in some sort of high. Until this morning, they were trying. And then another inflation number comes out and duh…not good. Let us not forget it is not just what you pay at the pump. It is also the thousands of products that are made with petroleum. It’s your Uber and Lyft driver. It’s the airlines and cruise lines. It’s pretty much everything. And oh…it’s the tariffs.

But we must take on the blame. We are hearing a little too much about the fed raising rates. We respectfully take issue. It’s not the fed. They are just playing catch up. How is the fed to blame when they are sitting at 3.75-4% fed funds while the 30 year sits at 5.62% as we write this? Ten year at 5.316%? The 5 year is 5.131%. The 2 year…yes the 2 year is at 4.95%. The 2 year is basically a stick above the fed. Even the 1 year yield…the 1 year at 4.615%. Again, watch yields. The fed is just a bunch of spectators playing catch up. The fed is a non-event right now. If yields keep going higher because of inflation, it is the fed’s job to move in sync.

WATCH YIELDS. WATCH THE FREE MARKET OF YIELDS. This is dictating. The fed is not meaningful here. Nothing good happens if real yields continue higher. Yields remain stretched and extended to the upside but remain in bull mode. This needs to change.