Deflation Surprise: Are Rates Ready to Turn?

Could the bond market be on the verge of a major turning point? In this week's Master the Markets, host and expert Bill Bodnar breaks down one of the most encouraging inflation developments in years: the first outright deflation reading in six years. At the same time, Fed Chair Kevin Warsh delivered a clear message on Capitol Hill that the Federal Reserve will not tolerate inflation, reinforcing the central bank's commitment to price stability.
Despite those positive developments, the market remains divided. Some Wall Street firms are turning increasingly bearish on bonds, forecasting even higher interest rates ahead. Bill explains why forecasting rates is never easy and why this could instead be the moment when the market begins shifting in the opposite direction.
The week ahead features a relatively quiet calendar, with no major economic reports and no Fed speakers as policymakers enter the blackout period before the next Federal Reserve meeting. That means technical analysis will likely play an even larger role. Bill continues to watch the critical 4.60% level on the 10-year Treasury, a key marker that has held up over a long-term market trend.