The bond yield's big breakout is for real. Here’s why

As the 10-year Treasury yield holds steady around 3 percent, some may wonder whether higher rates are here to stay.

Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management, said the breakout on the 10-year yield would last. He explained why Wednesday on CNBC's "Trading Nation."

• The natural pressures of steady growth, tightening monetary policy and rapidly expanding Treasury paper points to higher rates from here.

• Tuesday's Treasury auction for the 3-year note saw the weakest demand since November, with yields hitting a decade-high. Demand at the auction was broadly weak.

• Ultimately, debt markets will no longer sop up U.S. issuance, and that will create a natural pressure on yields. This means the dollar rally should continue, bond prices will fall and equities will need much stronger growth to rise.

Bottom line: After a break above 3 percent, the 10-year Treasury yield is likely headed higher.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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