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Tackle Today: Interest Rates Balloon

September 19, 2022

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Tackle Today: Interest Rates Balloon

«Ten-Year Yield tops 3.5%.»

Traders,

Ballooning interest rates continue to dominate the headlines. This morning, the 10-year Treasury yield topped 3.5%, reaching its highest since April 2011. Meanwhile, the 2-year Treasury yield, which closely tracks forward expectations for the Fed Funds rate, climbed just shy of 4%. That’s its highest level since 2007.

Rate whispers have been ringing the alarm bells about the inverted yield curve and the pessimistic picture it paints about the economy’s future.

CNBC quoted one such analyst this morning: “The 10s-2s spread plunged last week and was trading at -46 bps on Friday and is just a few basis points from setting fresh multi-decade lows,” wrote Tom Essaye of the Sevens Report. “The signal from 10s-2s is clear: The economy is going to slow materially and likely contract materially in the coming quarters, and it’s a message I believe we continue to need to heed.”


Video of the Day: Why You Should Use Implied Volatility to Buy and Sell Options

In this video, Coach Noah explains the importance of Implied Volatility when considering buying or selling options.


Chart of the Day: Ten-Year Treasury Yield ($TNX)

Chart of the Day: Ten-Year Treasury Yield ($TNX)

New high achieved. Unfortunately, there’s still a yawning chasm between the level of inflation and the Fed Funds rate (8.3% vs. 3%). History suggests the gap must narrow.


Today’s line up

Traders Lounge 11 AM EST

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Halftime Report 12:30 PM EST

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Bear Market Survival Guide MasterMind Group 7:00 PM EST

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