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Treasury Yield Surge to Threaten Bull Run’s Last Resistance Line

  • Logarithmic scale shows four-decade yield downtrend at risk
  • USTs have slumped 8% this year, eyeing worst drop since 1973
Pedestrians and cyclists pass the U.S. Treasury building in Washington, D.C., U.S.
Pedestrians and cyclists pass the U.S. Treasury building in Washington, D.C., U.S.Photographer: Tom Brenner/Bloomberg
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The relentless selloff in Treasuries continued Tuesday, threatening to mark a resolute end to the four-decade bull run in bonds, at least according to one key metric.

Benchmark 10-year yields rose above 2.80% to the highest since December 2018 as traders bet the Federal Reserve will ramp up the pace of tightening to curb inflation. Strategists from JPMorgan Asset Management to MUFG Securities Americas say yields may climb past 3%. The chart below shows that the long-term downtrend in 10-year Treasury yields plotted with a logarithmic scale would be breached at around 2.83%.