US interest rates

In my previous post on US interest rate written on 27^th Feb 2017, I wrote the following,

“The last chart is a quarterly chart of US Treasury 10-year Yield. US   YR yield made a high of 15.82% in 1982 and a low of 1.318 in 2016. If we look at the given quarterly chart this is the first time in last 34 years that the yield broke out of a downward sloping channel.

This can lead to two possible scenarios

1.      Interest rates will again fall below the breakout line and interest rates will stay benign in US

2.      If Interest rates sustain above the channel breakout, then Yield will move towards 4% range.

Since I had some bitter experience with interest rates forecasting which is controlled by fed, I will abstain from forecasting interest rates but my best case expectations call for a breakout.”

Since then 10-year interest rates have moved up to 3.11 and had broken above 3.05 level which was the peak from last 7 years. I think interest rates will trade to 3.55% - 3.65% where they will face long-term resistance at the trendline.

Whether interest rates will be able to sustain above 3.55% or not is anyone’s guess, but if FED continues to hike rates it does have a chance to move above it although the move can be transitory in nature.