This chart, hands down, is one of my all time favorites. It tells the entire story.
Bond yields hit their first long term cycle bottom in the 1940s. Then we had the stagflation of the ’70s, followed by the blow off top in 1982. From there, a nearly 40 year downtrend in yields that ended in 2020.
After that, yields have been grinding higher.
Now, if there’s ever going to be a year where bond yields take a breather, it’s probably this one.
But here’s the thing. In an environment where inflation refuses to back off, any dips in yields are likely to be short lived.
And let me make this crystal clear… just like I’ve been saying for the last five years: Long bond yields are going to have a hard time breaking lower.
And as always, be sure to download this week’s Bond Report
