Two-Year Treasury Yield Hits 10-Year High

“The Fed is continually worried that the economy is going to overheat and that’s probably one of the biggest issues. … I also think the Fed’s trying to get rates higher in case of a possible slowdown in the next few years so they can reaction with monetary policy,” he added.

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In the meantime, Treasury yield contagion appears to be racking the markets as the Dow Jones Industrial Average fell over 250 points in what has been persistent bouts of volatility in the markets as of late.

“The bottom line is that the long end of the US yield curve has managed to break out for the first time in several years and that other developed market yields have also been moving higher,” said Michael Shaoul, chairman and CEO of Marketfield Asset Management. “The fact that US yields only dropped slightly during last week’s equity rout is a sign that little demand for these instruments was sitting on the sidelines and there are already signs that the long bond is ready to revisit its recent high at 3.44 percent.”

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