No respite for bond bulls, Treasury yields clock 2016 high

Bond portfolios are being decimated by a relentless downtrend triggered by the ‘Trump Bump’ and the resulting speculation of a steeper Fed rate hike path.

The US 10-yr yield clocked a fresh 2016 high of 2.338%. The yield had clocked a low of 1.715% in an immediate reaction to Trump victory on November 9, before the realization that the economy could witness high growth/high inflation during the Trump Presidency weighed over the bond prices.

Meanwhile, at the short-end of the curve the story is no different. At the time of writing, the 2-yr yield, which mimics the short-term inflation/interest rate expectations, was trading at a one-year high of 1.067%.