10yr yields dropped a precipitous 10bps yesterday. While this isn’t much compared to some of the more volatile days of the past 6 years, it’s one of the most abrupt moves lower in the past few years. It’s strength is all the more impressive in that it comes after nearly two weeks of moderate improvements.
But is this much of a rally a good thing? First of all, yes. It accomplishes the primary goal of breaking 10yr yields definitively back under 2.50–something we had yet to be totally convinced about.