Looking at the June 10-year note today we have a high of 131-135 and a low of 130.26. Earlier this morning, we made a new high on the yield at 1.775 eclipsing the old high of 1.75. The major reason for this push up in yields is the ongoing talk of more stimulus. That is negative for treasuries because the more stimulus people are getting, the hopes are that consumers will spend, which will in turn create inflation. Another reason we continue to see a rise in yield/price decline is because as more states are opening.

The economy is gaining steam and the fed is behind the curve in terms of where rates are and should be going. The problem that the fed has right now is they don’t see the current inflation and they keep stressing that they don’t mind if inflation goes above the so-called magic level of 2%. The market is telling you that the fed is behind the curve and late to the party. All the fed knows is to continue to print money and not realize that there will be severe consequences as they continue with this reckless behavior. Living costs like groceries and gas have been increasing for a while, and those in low-income situations are having an increasingly hard time keeping up.

10-Year Note Jun ’21 Daily Chart
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Greg Perlin

Senior Market Strategist

Greg is a former Chicago Board of Trade member. He was an independent floor trader, pit broker and floor broker with Cantor Fitzgerald. Some of his clients included traders from Morgan Stanley and Lehman Brothers. He also acted in the capacity of desk manager for the morning trade desk. Greg was part of the elite Lind Plus Division for 10 years before joining RJO Futures in 2011.

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