The pesky 2.40% level has been a thorn in yields over the last year

It's just a level that will not hold out by the look of things. US yields have been looking to make a comeback following the Fed's rate hike last week, but again that 2.40% level just isn't wanting to give way. It is currently trading at 2.388% after touching a high of 2.399%

The bond market is sending a strong signal here, and that's really putting the Fed in a difficult spot. Just how many rate hikes will the Fed need to take in order to lift longer-dated yields?

I talked about this matter here earlier in the month, when comparing it to the Fed's 2004-2006 tightening cycle. Back then, only when the Fed funds rate closed in on 10-year yields, did yields actually start budging. It looks to be a repeat of a similar scenario here (time will tell), but expect some quarters of the market to express concerns/anxiousness if we do approach such a scenario and yields remain subdued.