Bond yields could race through 5% in next couple of weeks, market forecaster Jim Bianco warns


Wall Street forecaster Jim Bianco expects Treasury yields to go a lot higher — and possibly overshoot through 5% in the next couple of weeks.

“I don’t think we’re near the end of this move in the bond market,” the Bianco Research president told CNBC’s “Fast Money” on Tuesday.

If the Federal Reserve hints about ending interest rate hikes while investors still sense inflation, Bianco warns they won’t buy bonds.

“That’s what I think has been killing the bond market,” he said. The more the Fed talks of being done and waiting for [and] to assess all the rate increases they’ve made, the worse it gets. “

Yields on the 5-year and 10-year Treasury notes, as well as the 30-year Treasury bond, hit their highest levels since 2007. The yield on the 10-year Treasury reached 4.8% Tuesday. Bianco believes that 4.5% is fair value. Bianco said, “I think that what you’re seeing in the bond markets is a capitulation.” “Most bond investors

and bond managers were long for the majority of this year. They have been trying to explain why there will be a recession. They’ve been trying to argue why there will be a recession. They’ve had their brains beaten in and can’t stand it any longer. The bond market’s volatility is spreading to the stock market. The Dow Jones Industrial Average[and] has had its worst performance daily since March, and now is negative for the entire year. The S&P 50

, the Nasdaq Composite, and other stocks also ended up with a daily performance that was more than 1% below where they started. “We have plenty of room to move to the upside,” Santelli stated on Monday. If someone asked me, and put a gun in my face, and said, “Listen, , the worst-case scenarios, where will Treasury rates go?” 10-year?’ In the next seven-year period, I would say that you can expect to see 13,5% or 14%. “Bianco views yields this high as an extreme situation. “13%? That would take something bad to happen — a lot worse than I anticipate,” he said.Disclaimer