200 years of US interest rates in one chart

21-Nov-2016

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An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. Oxstones.com also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.

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By Amanda Diaz, CNBC,

History shows the only place for interest rates to go from here is higher — according to veteran technical analyst Louise Yamada.

Looking at a chart of U.S. interest rates over the last two centuries, Yamada pointed to a bottoming formation that has been in place for the last several years.

“We’ve been looking at the process that we think has been taking place over the last six to eight years in our interest rates, and we think now that the 2012 low probably is going to prove to be the low just the way 1946 proved to be the low in the last cycle,” the head of Louise Yamada Technical Research Advisors said Thursday on CNBC’s “ Futures Now .”

The yield on the U.S. 10-year has surged to 2.3 percent following the election on higher inflation expectations under President-elect Donald Trump and the potential for a Fed rate hike next month.

“I think it would be very healthy [to raise rates],” explained Yamada. “We are definitely watching 3 percent because that’s going to be the ultimate level at which we can definitively say that rates have reversed.” That 3 percent also corresponds with the 1980 downtrend on Yamada’s chart.

“We are looking at the formation of the higher low, and the 10-year note would have to put in place a slightly higher high to define the real technical evidence of the reversal,” she added.

Ultimately, Yamada said that higher rates will boost equity prices in the near term, as past cycles have signaled a boom in stocks and the economy.

“The early stage of a bull market can be accompanied by the initial rising rate cycle,” she said. “It isn’t until you get to about 5 percent that you start having problems.”

The S&P 500 (INDEX: .SPX) closed Thursday within a fraction of its all-time high.

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