An Undisputed Consensus Emerges

Without question, among bond market experts and general market pundits, there is a clear and unequivocal consensus brewing that if rates on the 10-Year Note touch near 5% again, as they did back around Halloween 2023, then it will mark a definitive top in rates just like it did back then. 

Naturally, I take the other side of that view, as I have been consistently hawkish on higher rates in the bond market for several years now. I continue to view both the trend and pain trade for rates on the long end of the curve as being much higher from here. 

You will also note that back in late-October 2023 when the 10-Year almost touched 5% we had the S&P 500 down around 4,100. As of now, the S&P is toying with 5,800. 

Here, again, on the matter of the S&P relative to the 10-Year rate there is another consensus brewing that the market is pricing in much stronger economic growth than anticipated in both stocks and bonds. 

However, that fails to take into account the view we have been noting with Members, that the bond market has effectively "gone rogue" against The Fed, Treasury, and Congress, since last September's jumbo rate cut. In other words, the bond market has decided enough is enough. 

Also note the bond market is the only entity who can effectively make this call, to force the powers that be to reign in spending and dovishness, since they will assuredly not do so on their own, as history and human nature teach us. 

On the TNX (Index for Rates on the 10-Year Note) monthly chart, below, the technical rationale for my view is that rates are uncoiling from a multi-year bull flag higher.

It is unlikely they will simply stop at the October 2023 highs just because folks think it is convenient to do so.