Friday was the first time since 2007 that any part of the Treasury yield curve sported a five handle. Friday, February 17, 2023, the one year hit 5.00%. Wednesday, August 22, 2007 the twenty year maturity was 5.01%, and hasn’t looked back since.

You have to go all the way back to April 1, 2002 to find a sixer.

There has been considerable speculation about the demise of the great bull market in bonds that began in the early 1980s. Bond mavens have been calling time on it for most of this century. It finally appears to have ended in 2020. The implication is that the US dollar debt system is likely to have entered a new secular bear market, and that what we’ve seen over the past couple of years is the first cyclical bear in an extended period of rising interest rates.

We aren’t surprised, having speculated over three years ago in Outlook for the 2020s that Treasury bonds would be unlikely to repeat their bullish performance of prior decades. On a cyclical basis, I continue to think that Treasuries represent a good value here in 2023 (particularly compared to US stocks), but the secular outlook is bleak.