Last week's meeting was meant to be the one where the US Federal Reserve got real and prepared to start pulling interest rates back up to more "normal" levels. The policymakers failed. Instead, all US treasury rates slumped from this month's highs, led by the benchmark 30-year
treasury bond in this chart so that the yield curve flattened. The A, B, C type correction (where C is 61 per cent the height of A) from a record low at 2.221 per cent peaked just under the Fibonacci 38 per cent retracement and trend-line resistance. We target a drop in the near term to 2009's low at 2.514 per cent and then the low of 2.443 per cent in 2012. Later this year, we expect new record-low yields.
