Rates of Change

Look in the mirror
And you see that you've been taken
You won't surrender
But now your heart is breakin'
--John Waite

As attention centers on major U.S. equity indexes once again marking all time highs, Ten Year yields have quickly but quietly moved to the top of the multi-month channel. Currently they rest near the May highs of about 3.1%.

Do bonds smell a pick up in price inflation? Plenty of factors point in that direction (e.g., rising wages, tariffs/trade wars, $trillions on financial stimulus slowly leaking into consumer markets).

Whatever the reason, we can be confident that the higher rates go, the greater the headwinds for our leveraged economy and financial markets.

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