TLT - 10-Year U.S. Treasury Yield 'Fair Value' Estimate: May 16 2024

2024-05-16 11:30:00 ET

Summary

• A fair value estimate of the US 10-year Treasury yield was steady in April while the market level for the benchmark rate continued to rise well above the theoretical level.
• The current fair value estimate for April is 4.21%, fractionally below the previous month’s level.
• Following yesterday’s upbeat US consumer inflation news for April, the 10-year yield fell on Wednesday to a six-week low of 4.34%.

A 'fair value' estimate of the US 10-year Treasury yield was steady in April while the market level for the benchmark rate continued to rise well above the theoretical level. But trading activity this month suggests the trend may be shifting. Yesterday's sharp fall in the 10-year yield (May 15) substantially narrowed the spread, which implies that the market's premium over fair value had become extreme....

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