This market is like a game of Jenga
And the US 10-year Treasury Rate is the piece holding it up
This is a chart of the 10-year Treasury yield. The chart is 10x the yield itself, so 43.36 is a yield of 4.336%.
It is to the bond market what the S&P 500 index is to the stock market. The benchmark, the lynchpin, the marker for so much investment capital. It impacts the bond market, both high quality and high yield. It impacts the stock market, in the US and globally. And it affects the markets for mortgages, real estate and a whole lot more.
And, it is NOT set by the Federal Reserve. The Fed sets overnight lending rates. The 10-year bond is influenced by that, but the players who make it move up and down are market participants, as well as bidders at bond auctions the US holds constantly. Because that’s what you do when you have the biggest debt buildup in history.
I don’t know where the 10-year yield will go, because no one does. However, so much of investing is not betting on the direction of things like this, but evaluating multiple realistic scenarios and their possibility of occurring. Then, most importantly, positioning the investment portfolio to be ready for anything. At least, that’s how I roll.