TBL's 2.5% 10-year Treasury target reached. Bitcoin establishes real support. Another hike in September.
TBL's 2.5% 10-year Treasury target reached. Bitcoin establishes real support. Another hike in September.
The 10-year US Treasury yield has fallen 100 basis points since June 14th. Looking at bitcoin on a logarithmic scale. More tightening ahead.
Dear readers,
Rates move quickly. But not as fast as bitcoin. Today’s post is a closer analysis of the price of each of our two worlds here at The Bitcoin Layer—rates and bitcoin. I also have a refined outlook for the rest of the year’s global macro scene. While Europe takes the month to holiday, Fed watchers prepare for a Jerome Powell speech at Jackson Hole toward the end of August.
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Today’s topics
We called this recent move in yields
Sizzling CPI and buoyant stocks give the Fed permission to hike
Inverted yield curves and a technical recession warrant a pause
Conclusion: one more hike, at least
Bitcoin is a dreamy investment opportunity
On June 14th, 10-year yields reached what I strongly believe to be the highs for this year of 3.5%. On July 1st, I published a chart pack outlining my price analysis—10s were at 2.95% when striking charts for the post—making the call that rates had topped and were heading back down to 2.5%:
I believe that 10s are now heading back down to the 2.5% area, and the price study aligns nicely with the fundamentals, which are that economic growth and inflation expectations are quickly declining, as some recession indicators are blinking and others are blaring sirens, flashing red, and blowing recession smoke.
On Tuesday morning, 10s briefly touched 2.51% before bouncing on hawkish Fed headlines, but consider this active call now closed. Both the fundamentals of peak tightening and price analysis of failing momentum and bearish divergence led to the call for 2.5% 10s, but where does that leave us today?
There are a few factors at play, and separately, bitcoin has cleared from its dual burden of leverage and hype overhanging from the 2021 crypto-mania and the end of uber-easy monetary policy.