10-year Treasury yields are flat just above 1.34% today
Bond sellers looked like they were in the mood in the early stages of the week, as 10-year yields clinched a move back above 1.30%.
But the highs for the week are limited closer to levels just below 1.38%, coinciding with the highs in the past two weeks. That reflects more tentative sentiment as traders will be hoping that Fed chair Powell will provide some hints on how to proceed next.
There's a Goldilocks region for yields, in which will keep risk sentiment more upbeat and limit fears about the Fed tapering/tightening policy.
I would argue that sits in between 1.30% and 1.40% and given the state of play going into Jackson Hole, I reckon we may still settle in between that going into next week.
The measured target for the double-bottom at the July and August lows is roughly around 1.52% and that is a level that may fit with the narrative of a gradually more hawkish Fed seeking rates flexibility as the inflation picture sorts itself out.