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Cramer: Bernanke's Fed Has Lost Control of Bond Market

Monday, 24 Jun 2013 | 10:19 AM ET
Monday's Market Roadmap
Monday, 24 Jun 2013 | 9:01 AM ET
The "Squawk on the Street" news team reports on today's top business headlines, including the outlook on today's trading action, and Moody's downgrade of Hong Kong banks.

A rapidly climbing yield on the 10-year Treasury is a signal that Ben Bernanke and the Federal Reserve have lost control of the bond market, CNBC's Jim Cramer says.

The yield on the 10-year Treasury note rose to 22-month highs as prices for the benchmark asset continued to slide in the wake the Bernanke's comments on the impending end of the Fed's massive bond- buying program.

(Read More: US 10-Year Yields Hit 22-Month High on Fed Fears)

"The 10-year takes my breath away," Cramer said on "Squawk on the Street" on Monday. "I'm listening to people talk about how the Fed is still in control of the bond market. They lost control of this. Completely."

Looking at the charts, many stocks "seem to be in the wrong place, they seem to want to go down. Particularly the companies that are still bond market equivalents," Cramer said. "Utilities, some of the Telcos, they still don't yield what they should if the 10-year is going to 3" percent.

For instance, he said, a bond market equivalent stock that yields around 3 percent, such as Clorox, becomes less attractive when less risky Treasury bonds carry a similar yield. He added that a company like General Mills—a company he likes—is still "a bond market equivalent that doesn't work."

"It's just breathtaking" to see the bond market so in charge, Cramer said, suggesting that investors monitor the movement of the bond market through the 10-year Treasury yield index (.TNX).

(Related: Bond Fund Outflows Hit Record Level on Tapering Fears)

"I just want to see the .TNX back off and then people come in. And then you would feel more comfortable," he added. "The 10-year is just such a bad piece of paper, the duration."

(Related: Buy Treasurys, as Bernanke's Tapering Is All Talk)

"Bernanke is boxed in a corner. He has become the world's largest bond trader," Cramer said. "Did he ever intend to be the world's biggest bond trader? I don't think so."

— By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul.

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