Is the “bull” Bond Market rally over? If all the following conditions are confirmed higher yields are inevitable:
1.The Fed will not undertake another round of quantitative easing
2.The U.S. Economy shifts to a sustainable recovery
3.China and other major emerging economics rebound after dipping in the first half of 2012
4.The eurozone recession doesn’t shock the global economy.
But none of these conditions is yet certain. For the next several months the bellwether 10 year Treasury yield should stay in a tight trading range about where it finished today at 2.25 per cent.
- George Moore, Senior Vice President, Tidewater Home Funding