Veteran trader Peter Brandt predicts that the 30-year US Treasury bond yield has concluded its recent pullback and is poised to rise toward a range of 6.5% to 7%. Brandt considers a decline below 5% to be unlikely. On Tuesday, the 30-year yield was approximately 5.35%, having previously retreated from an October peak of about 5.67%.
The yield reached a low of 5.22% during its recent decline before rebounding. Historical data indicates that the 30-year yield rose from 4.83% at the end of June to over 5.3% by August. Recent market movements were influenced by an inflation report for October and comments from Federal Reserve Governor Christopher Waller, leading traders to price in an 84% probability of a rate hike in December.
A potential move to 7% would surpass the 6.15% average yield recorded since 1977. Such an increase could impact mortgage rates, which previously hit a two-year high of 7% when the 30-year yield approached 5.5%. Analysts from Merrill have identified a sustained 10-year yield above 5% as a significant risk for equity valuations, while Bitcoin currently trades near $73 820.
Despite Treasury Secretary Scott Bessent doubling long-dated bond buybacks to $4 billion, the 30-year yield remained above 5.3%. Market participants are monitoring these developments as they could lead to a repricing of corporate debt and various assets benchmarked to the risk-free rate, including cryptocurrencies like Bitcoin.
