US 30-Year Bond Yield & Future - It is the MARKET not the FED.
Investors have a high respect of the US FED. They believe that the FED is in control of the US interest rates. For example, over the past few months, investors have speculated if and by how much the FED will lower rates. Also, president Trump thinks that if the FED were to lower rates, then the US economy would grow faster. HOWEVER, fact is that the FED has some control only over the short-end of the yield-curve. Moreover, empirical evidence shows that the FED does not have much influence for example on the 2-year maturities. It is rather the opposite, meaning that the FED fallows the 2-year yield. When the 2-year yield is much below the actual Fed Funds Rate, then the FED is most likely to cut. The 2-year yield has a bigger effect on the FED decisions than the opposite.
With regards to the longer end of the yield curve, it is the market (buyers and seller) that is driving the prices in the futures market and the yield is calculated from the price changes. If there is a bull or bear market in the US yield curve, it is best visible in the 30-year yield.
Presently, the 30-year yield is at a critical juncture. In early On May 22, 2025, the yield registered a high at 5.1610%. This is very close to the high from October 23, 2023, at 5.1790%. If the yield pushes higher, then it would register a new 19-month high. This means the yield has remained in a correction/consolidation between 4% and 5.50% for 19 months. A break upwards would be a very strong signal and indicate higher yield levels at 5.75%, 6.20% or 6.70%. Such a breakout in the yield would mirror a major decline in the 30-year bond price. See the middle chart.
The yield chart on top shows the pending break of the 30-year yield above 5.1790%.
The chart below shows the 30-year T-Bond price future. The next SELL signal would be triggered if the support range between 110 and 109 is broken. There could be a waterfall decline to 105, 100 or below. OBVIOUSLY, SUCH A BOND DECLINE AND YIELD RISE WOUILD BE MOST BEARISH TO THE STOCK MARKET. To reduce the downside risk, the Continuous Future must rise above 115 and 118.
The next lower chart shows the long-term chart, which puts the short-term chart into perspective.
The chart below shows the 30-year T-Bond Continuous Future. It registered the all-time high on March 16, 2020, at 200. After this peak, it fell to October 23, 2023 at 107.13. This was a decline in the bond price of 46%.
The bond future has been in a consolidation since the October 2023 low. I THINK THAT THE ODDS FAVOR A RESUMPTION OF THE PRICE DOWNTREND AND A DECLINE BELOW 105 AND BELOW 100. I would become bullish on the 30-year price future only if the Fibonacci resistances at 118 and 123 are broken.
