October’s 3.455% peak fell well shy of the 3.590% top in rates that I’d forecast. The fact that the rally did not quite reach its ‘D’ target gives the reversal extra power — enough, presumably, to hit the 2.665% target shown (click on inset). More immediately, we can use the 2.862% midpoint pivot as a minimum downside objective. These numbers imply the U.S. economy is headed into recession. How else could rates fall to the levels noted above? QE5 is coming eventually, but will be too late to turn the housing and auto sectors around. In the end, T-Bond rates will have fallen much lower without any help from the central bank.
