As John Maynard Keynes famously stated “When the facts change, I change my mind. What do you do, Sir?”. I am very close to changing my mind on the direction of long-term interest rates. The chart of the 10-year U.S. Treasury yield shows that a formidable bottoming pattern has been formed during the past 8 months and a break-out above the 2.31% yield level could signal the end of the 30+ year bond bull market, which began in the early 80s when Paul Volcker was Federal Reserve Chairman.
A well-timed Treasury Bond short could very well be the trade of the year.