Friday, December 5, 2014

The 2-Year Treasury Yield Has Gone Parabolic

December 5, 2014
Treasury 2-Year Yields Highest Since 2011 as Jobs Spur Fed Views

Treasuries fell, pushing two-year note yields to the highest level since 2011, after the U.S. added more jobs than estimated in November, boosting the speculation Federal Reserve policy makers are getting closer to raising interest rates.

The following chart shows the 100-trading-day moving average of the 2-year treasury yield.

Click to enlarge.

What a beautiful parabola! Note that it touches both of the two previous lows (in 2009 and 2010).

So what does this mean?

1. The end of ZIRP for all eternity! Woohoo!
2. 3% interest rates in 2020! Wow! So lofty!
3. 0% unemployment in 2019! Truly miraculous!
4. Dow 100,000 hats! Irrational exuberance? I think not!

If not for parabolic sarcasm, nothing could temper my optimism!

Source Data:
St. Louis Fed: 2-Year Treasury Constant Maturity Rate

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