Bond Blood

They are looking for blood in the bond market.  Haven't see a move down like this since the taper tantrum in 2013.  I do NOT think that it will be that bad of a bond rout, because monetary policy is not what is involved here.  The Fed isn't going to change their policy.  I see more of a spring of 2015, where yields went from 1.65% to 2.48%.

It is a new bond market now, it has a HUGE monkey on its back in the form of Donald Trump.  He has a blank check because Congress is Republican controlled, and he will be able to get away with massive corporate tax cuts and infrastructure spending.  A double whammy to the bond market.  Not only will Treasury supply balloon higher as the budget deficit soars, but you will get a marginal boost in economic activity from the infrastructure build and corporations making more post-tax income.

Despite all those things, these fiscal stimulus packages are usually more hype than substance.  But the hype will be in full force for the next few months.  It does not take away from my very long term view that bonds are in a structural bull market due to aging demographics and overleveraged global economies.  However, everyone trades in the short to intermediate term, so it is probably sell first, ask questions later.

Looking to buy bonds soon.  2.10% 10 year is my buy level.  There should be a short term rebound after the 30 year auction tomorrow is out of the way.