Forget Friday's bond rally off of the weaker-than-expected jobs report. Because while the 10-year yield dropped below 2.9 percent on Friday, Brent Schutte, market strategist at BMO Private Bank, says we've hardly seen the start of the rate rise. That would mean that bond prices, which move inversely to rates, have much further to fall.
"For all the talk of a cult of equities, I think there's a cult of bonds," Schutte said on Thursday's "Futures Now." "We had this great 30-year bond bull market that made people think there was no reason not to buy bonds, and that things were going to be OK."
But in Schutte's view, "4 percent (on 10-year Treasurys) somewhere around the end of the year to early next year would be a good intermediate-term level. And if you look over the longer term, I don't think that 6 or 7 percent is out of the question."
Schutte presented three reasons why a 7 percent yield wouldn't surprise him.