The 10yr/T-bill spread is telling a different story than the media….
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Rising 10yr Treas rates tell an interesting story.
Rhetoric raises tension N.Korea/US… and the 10yr Treas rate rises signaling investors are shifting towards higher return investments. This is a sign that investors are shifting towards believing Democratic principles likely to successfully confront autocratic threats.
The 10yr Treas rate(BLACK LINE) and T-Bill/10yr Treasury rate spread(DASHED GRAY LINE) fell 1 month ago as investors feared No Korea. The spread fell to 1.02% or 102bps. Today, as the US has responded strongly and imposes even more comprehensive sanctions with China, No Korea’s ally, onboard, the 10yr Treas rate has risen to 2.27% bringing the spread vs the T-Bill to 1.27% or 127bps.
This market response which can only be monitored through the daily detail is positive for equities.