Today's chart is a reminder that one of the world's most popular bets is one that will drive you nuts: It's the past seven years in U.S. interest rates.Folks love to predict interest rates. Real estate agents always predict higher rates and remind you to "lock in a low rate now." Speculators study all kinds of government reports to guess where interest rates are going. And many folks believe Uncle Sam's creditors will demand higher rates in order to compensate them for loaning to a risky borrower.
We track interest rates with the benchmark 10-year Treasury note. Back in May, the market blessed the "rates are headed higher" camp when this note's yield reached a six-month high around 3.3%. Rates then surged toward yearly highs around 4%. But in the last two months, rates have plunged below 3.3% to reach their lowest point since May.
If you held a gun to our heads, we'd say, "Yes... eventually all this freshly created credit and money will cause inflation... and thus, higher interest rates." But we'd also point to today's chart of the past seven years in the 10-year yield and say, "Baby, it's tough to make money trading interest rates." We'll stick with greener pastures in the stock and commodity
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