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Tim Knight Says the Bond Bear Market Is in Year Seven and Far From Over
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ticker lesson
Breakdown
0:00lesson
Interest rates and their historical context
- Interest rates have seen a tremendous move in recent months
- Data spans decades, showing a sharp recent shift
- TLT ETF reflects treasury performance over 25 years
- TLT peaked in early 2020 due to near-zero rates
- TLT has been in a grinding bear market for seven years
2:18TLT· ticker
TLT — grinding bear market, multi-year lows
- TLT incorporates dividends and treasuries
- TLT peaked in early 2020 due to near-zero rates
- TLT has been in a grinding bear market for seven years
- TLT recently broke down to multi-year lows
4:3230-year Treasury· ticker
30-year Treasury — bottomed in 2020, now at multi-decade high
- 30-year Treasury bottomed in 2020 around the outbreak of COVID
- 30-year rate dropped to 1.2%
- Current rate is four to five times higher
- 30-year rate reached a new multi-decade high
4:335-year· ticker
5-year — pushed above recent high, approaching 5%
- 5-year rate pushed above recent high
- 5-year rate is approaching 5%
- 5-year rate is up 48 times higher than before
4:34corporate index yield· ticker
Corporate index yield — triple B bonds up to 6.2%
- Corporate index yield for triple B bonds rose to 6.2%
- Rate increased from under 5% to 6.2%
- Swift rise in interest rates closer to home
4:3515-year mortgage· ticker
15-year mortgage — sharp rise to 6.5%
- 15-year mortgage approached 5%
- 15-year mortgage turned sharply higher to 6.5%
- 1.5% increase represents 30% higher rate
4:3630-year mortgage· ticker
30-year mortgage — peaked at 18% in 1971, now above 7%
- 30-year mortgage peaked at 18% in 1971
- 30-year rate dropped to 2.5% in the depths
- 30-year rate is now above 7%
- Rate formed a top and broke down due to war
4:37lesson
War's impact on interest rates and future outlook
- War has had a profound effect on rates
- Seven months of war caused dramatic rate shifts
- Bond bear market may not end in year 7
- Big moves are affecting many people
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