Bond Yield Breakout, At Last?

The Federal Reserve headquarters in Washington, DC.
The Federal Reserve headquarters in Washington, DC.

Is this the long-awaited bond yield breakout?

The Fed story today is being told in the bond market, not in the stock market.

What did the Fed say in its FOMC statement? They said there was a whiff of inflation in oil and gas, but it would only be temporary, and there was not a word — not a hint — of QE3.

The 10-year Treasury went to 2.12 percent, which would be the highest since Dec. 7, 2011.

This bond yield breakout is a huge story: there is enormous money locked up in bonds...if that money starts coming out on a further breakout in yields, IT COULD BE A TIDAL WAVE.

Where will it go? Stocks are a good choice, and higher-yielding corporate bonds.

What would you rather own: 10-year Treasurys at 2 percent, or Ford corporates at 6.9 percent?

The Fed is committed to low yields until 2014...the market may be starting to say, you (the Fed) are not in control...the market is.

Where are you on the debate on global growth: up or down? Look at today’s headlines:

U.S.: retail sales better than expected

China: Nomura, Deutsche Bank raise GDP estimates

Bank of Japan: global economy improving

Germany: business confidence highest since mid-2010.

Today, the global growth camp is winning.

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