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

The big bond yield breakout is here to stay, and here’s why
The big bond yield breakout is here to stay, and 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.