Bond yields are on the move!
Suddenly the crowd has jumped on the bond yields are going up view, just read the press over the last few days. When markets get this much consensus coverage its often close to the end of the move.
Another major point from our January outlook piece comes to mind:
“Interest rates have bottomed; the question is how fast do they rise?” – MM.
We have been targeting ~3% for the US 2-year bond yield for over 6-months so its important not to get blinded by the press when the milestone is finally approaching fast.
While we continue to believe bond, yields have further to rally we can easily see 6-months choppy price action around this 3% area after the aggressive re-alignment by the market that we’ve received experienced.
No great investing themes here although if I had been “short” interest rate sensitive stocks I would be taking some $$ off the table – potentially an opportunity for some tweaking in both of our portfolios.
US 2-year bond yields Chart
