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Short-Term Improvements vs. Major Trend of Rates

Alan Fine • March 11, 2025

Short-Term Improvements vs. Major Trend of Rates

In mid-January 2025, highs were reached in interest rate markets as 10-year note yields peaked at 4.77%, and mortgage rates followed suit at 7.25%.

There has been much uncertainty in the market, generated by Trump’s implementation of tariffs; Department of Government Efficiency cuts to government employment and agencies; and questionable threats to our friendly country relationships with Canada, Mexico, and Ukraine. The stock market gave back earlier gains for the year, and investors sought safety by moving into the Treasury and mortgage markets, which caused this easing phase of interest rates by the first of March 2025. The 10-year note yield (rate) dropped to 4.20%, and the 30-year mortgage rate hit 6.70%.

Technical View

Charts are useful tools for technical analysis when analyzing markets because they create a picture summarizing all the world factors and events influencing values. See the chart below.

The 10-year T-note futures price chart shows that T-note prices move inversely to rates. The note values have risen to test a significant price downtrend in place for over three years. The chart indicates that note prices tested the downtrend and failed to break through. This is an indication that the downtrend remains intact, meaning interest rates are still in a long-term uptrend. A key technical rule is that trends persist until proven otherwise.

Summary

The 10-year T-note price chart remains in a downtrend, translating to higher yields and interest rates.

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