Will the Fed lower interest rates? It’s possible if they follow the yield on the 10-year note over the past 32 weeks.
This chart shows that the yield on the TNX has declined 31% in the past 32 weeks. That decline has yields testing 2017 lows while it tests the bottom of a steep falling channel.
Over the past 15 years, when rates have declined more than 30% in 32 weeks, rates were actually closer to short-term lows than highs. Will it be different this time?
If yields hit short-term lows, that will suggest that bonds are near short-term highs.
How TNX handles the support test at the 2.05% level will send an important message about the state of the economy. Keep an eye on this important level over the next few weeks.