10-Year Treasury Note, the truth

The 10-year Treasury note has a long and interesting history. It was first issued by the United States government in 1790, shortly after the country’s founding. At that time, the government was in desperate need of funds to pay off its Revolutionary War debt, and the Treasury note was one of the solutions it came up with.

The original Treasury note had a term of just three years, but over time, the government began issuing longer-term notes to help finance its operations. In 1857, the government began issuing 20-year bonds, which were later replaced by 30-year bonds. However, it wasn’t until the early 20th century that the 10-year Treasury note as we know it today was created.

The 10-year Treasury note was first issued in 1908, as a way for the government to finance the construction of the Panama Canal. At that time, the note had a 2 percent coupon rate and a maturity of 10 years. It was an immediate success, and quickly became one of the government’s most popular and widely held securities.

Over the last 12 years, the 10-year Treasury note has been on a wild ride. In 2011, the note yielded around 3.5 percent, but over the next few years, the yield dropped steadily, reaching historic lows in 2016. In fact, in July 2016, the yield on the 10-year note hit an all-time low of just 1.37 percent.

However, the yield on the 10-year note started to rise again in late 2016, as investors began to anticipate rising inflation and a more aggressive Federal Reserve. By the end of 2017, the yield had risen to around 2.4 percent.

In 2018, the yield on the 10-year note continued to climb, peaking at 3.23 percent in October of that year. However, the yield began to fall again in 2019, as concerns about slowing global growth and trade tensions between the U.S. and China weighed on investor sentiment.

Then, in 2020, the COVID-19 pandemic hit, sending shockwaves through global financial markets. As investors fled to safe-haven assets, the yield on the 10-year note dropped to historic lows once again, falling to 0.54 percent in March of that year.

Since then, the yield on the 10-year note has rebounded somewhat, but remains historically low by pre-pandemic standards. As of April 2023, the yield is hovering around 1.8 percent.

Overall, the last 12 years have been a roller coaster ride for the 10-year Treasury note, with significant fluctuations in yield driven by a range of economic and geopolitical factors. However, despite the ups and downs, the 10-year note remains a key benchmark for investors and economists around the world.

The technical situation (TA) is different but the same, observing the two graphs that are attached to this article.

In the first, we can see the bond, for 110 years (1913), in a technical linear movement. And how after its great rise in the 80s of the last century, it falls and locks itself in a channel with a defined descending top, which has been broken and surpassed in 2022.

On the contrary, the shorter duration chart, with logarithmic observation, shows us a downward trend in resistance, but in the same way… it has been overcome.

At the end of this article, and in my figure as the author of these words, I think that the logical thing to do is a drop in performance, to look for what was previously resistance in both charts, and is now support.

Not Financial Advice.