For anyone who was concerned about the flattening of the yield curve in recent months, you can breathe a little easier now that long-term Treasury yields are moving steadily higher. As of Thursday afternoon, the yield on the 10-year US treasury ‘spiked’ to 2.62%, putting it right near its 52-week high of 2.63% from last March. If that level is taken out in the next few days, that would take the yield to the highest levels since 2014.
When looking at the current levels of longer-term Treasury yields, a bit of perspective is in order. The chart below shows the change in the yield on the 10-year US Treasury since the start of the bull market in March 2009. During this span, the 10-year has traded in a range from 1.36% on the downside to 3.99% to the upside. Taking the mid-point of those two extremes gives us a mid-point of 2.68%. With the yield on the 10-year currently right at 2.62%, yields are still in the lower half of their bull market range!
So what can we expect from the market with longer-term Treasury yields on the move higher? To answer this question, we just published a B.I.G. Tips report which looks at how equities have reacted to prior increases in rates throughout the current bull market. Included in this report is an analysis of which sectors have typically reacted the best and worst to moves in yield.
For anyone interested in the trends we uncovered, check out the report by signing up for a Bespoke Premium membership now!