US Treasury 10-year yields (%) monthly chart

The gist of it is that the Fed is sticking to their ongoing pause as they continue to tout the narrative of higher rates for longer. In backing that narrative, they revised higher their projections for the economy and also raised their interest rate projections via the dot plots.

In particular, the Fed funds rate is seen at 5.1% in 2024 (previously 4.6%) and at 3.9% in 2025 (previously 3.4%).

That has seen bonds sell off even more on the week, with 10-year Treasury yields climbing all the way up to 4.43% now - its highest levels since 2007.

The breakout is a significant one on the charts as there is little standing in the way of a further rout in the bond market all the way through to above 5%, if you go by the technicals.

What does this mean for broader markets?

For equities, it means that there could be more pain after the heavy selling yesterday if yields continue to soar especially with the help of the backdrop of the waves of supply in Treasuries.

As for the dollar, it's quite a straightforward one in that the greenback should continue to stay more bid as a result. USD/JPY is one to watch on this as it continues its path towards 150 and BOJ intervention territory:

USD/JPY vs US Treasury 10-year yields (%) hourly chart