If the 10y Bond drops below the 4% floor, look-out, rates are headed lower . We are almost there.

Think of the bond market like a house with very opinionated architecture.

The floor is that stubborn support level where yields drop(lower rates), knock politely, and the market says, “Nope. That’s cheap enough.” Buyers rush in Rates drop. The floor did its job.

The ceiling is the opposite. Yields climb higher (rates go up), peek their head up, and investors say, “Absolutely not. That’s too much.” Money pours into bonds, prices rise, yields fall, and rates back off. Ceiling holds.

Sometimes bonds pace between the floor and ceiling like a kid stuck inside on a rainy day, restless but contained. Other times they break through like the Kool-Aid Man yelling, “Oh yeah!” and suddenly we’re repricing before lunch.

We are dancing on the floor and it’s going to break through driving rates down.

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