• This chart explains why higher rates are coming

    Amanda Diaz at Talking Numbers3 days ago

    Could the end of the epic bond rally be afoot?

    U.S. treasury yields rose along with the broader market Thursday following Wednesday’s Fed announcement that suggested interest rates could begin to rise in the next year. The yield on the U.S. 10-year hit 2.2 percent during Thursday’s trading, the highest level in more than a week.

    Now, bonds have been the surprising trade of 2014. The end of the Fed’s stimulus program was supposed to lead to higher rates, but the exact opposite has happened: the yield on the 10-year has fallen from 3 percent in January to 2.2 percent. Yields fall as bond prices rise, and U.S. treasurys have benefited from low rates abroad. The yield on the 10-year German bond is 0.6 percent, and that has helped anchor rates here, but some see more pain to come in the bond market.

    (Read: Equities surge on Fed cues; oil resumes decline)

    “We think by the end of the year we could be another 5 to 10 basis points higher on 10-year yields,” said Ira Jersey, director of U.S. interest rate strategy at Credit Suisse.

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