One of the most accurate higher-for-longer market forecasters, Jim Bianco, says, “Ultimately, I still think we’re going to go higher (on rates) and see a capitulation.”

Mr. Bianco says that if we are going to un-invert the yield curve, rates need to go higher than the 6 month T-Bill rates of 5.5%.  Again, jobs are strong, we’ll have a 4% GDP print, and the last ten years were abnormally low.  Additionally, we have more long-term Treasury issuance coming up, and the Japanese could sell and buy their own JGBs if their rates move higher.  In terms of positioning, he thinks that most people are positioned for an elusive Treasury rally.  He cites the BofA survey indicating a record amount of managers anticipating the next 100 bps move to be lower and flows/call buying into the TLT.