On Sept 23rd, we published a slightly controversial trade note entitled The US 30Y Is Heading to 6%, back when it was trading at 5.39%. At the time, we were already hearing chatter from some who believed the price dip would be bought, ironically similar to those who thought 5% would be the 10-year yield cycle top.
We disputed this and laid out our reasoning for shorting the 30-year Treasury and targeting 6%.
In the weeks following our note, the 30-year yield has climbed to fresh highs, at 5.7% as we write. Even though we are nicely ITM, we’re still banging the drum for 6% and hold to our view that this level will be seen before year-end.