Just How Stretched Is The 10-Year Treasury?

Really stretched.  The bottom histogram is the percentage which the 10y yield deviates from its 10y (linear regression) trend.

We’ve only been here once before, during the height of the credit crisis in late 2008/early 2009.

Even if you’re bearish on the global economy, or expect hard deflation, the pay-off in betting large on US government bonds seems particularly unattractive at this point.


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