Bond market is the best poll

There’s a bond market sell off going on the past week.

The US 10-year note has increased in yield from 1.72% last Friday to 1.86% this morning. In bonds when the price is lower because of selling, the yield rises.

As large a market as US Treasury debt is, this major a move over the week is sizable and should be noted.

Is it tied to the presidential election?

You could make the argument that the move is tied to a Hillary Clinton win, since there will be a plenty of additional debt being generated, since it will be seen as an extension of Obama’s debt issuance and the bond vigilantes want to be paid for continuing to fund the US government.

You could also cite the rise as a hedge for a Donald Trump win since there is a concern debt will be renegotiated or issuance will be reduced.

Either way depending on an analyst’s political leanings you could write a report saying this is tied to the election.

Let’s keep an eye on rates over the next week, but today’s GDP report could be a bigger mover for rates in the shorter term.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.