Can long bond yield move towards 3%? What happens if the economy plunges into depression and deflation?
Long bond yield in the future is the biggest suspense out there in the minds of the investors. The recent sharp moves downwards in typical of an extreme anti-climax move that normally happens before a long-term trend starts in the reverse direction. Based on that theory, it is possible the long end of the yield curve can actually start dropping fast from here. It is possible that the 30-year Treasury bonds will yield 3%. But for that something has to happen in the economy. The economy has to fall into some kind of major recession and the market perception has to change from inflation to deflation. Then the question because what does the technical chart pattern of thirty year Treasury bond suggest? What is the probability of a major recession? What is the probability of deflation The technical chart pattern of 30 year Treasury Bond is bullish like never before. If the yield goes down for whatever reasons, it will crash like never before. The yields can get to 1% replicating what happene
