TBF ProShares Short 20 plus Year Treasury

After falling steadily from mid-March to early-May, the yield on the 10-year U.S. Treasury note has risen rather sharply over the last two weeks. You can see this reversal in the chart below:

Of course, you have to put this in its historical context. The 10-year Treasury yield is still ridiculously low compared to its long-run median of 6.6%.

And we have seen sudden rises in the 10-year before that looked like yields would start "reverting towards their mean", only to see the trend quickly reverse (see October 2011 and March 2012 in the first chart above).

This could very well end up being just another head fake, with the 10-year staying within the same range of 1.4% and 2.4% that it has since August 2011.

Ben Bernanke and the Fed certainly don't want to see yields move higher. The central bank continues to buy $45 billion in Treasury bonds as part of QE3.

But what do you think is causing the sudden rise in the 10-year?

Could it be a "risk on" move by investors as they rotate out of bonds and into stocks? Are inflation concerns starting to finally creep into the market? Or is it just more noise within a range for the 10-year?

Chime in below.

 
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