Benjamin Cowen Predicts 10-Year Treasury Yield Peak Before Midterms, Potentially Benefiting Bitcoin

Analyst Benjamin Cowen anticipates the 10-year Treasury yield to peak before mid-November, following a high of 5.342% on October 1. This peak could alleviate pressure on Bitcoin and other risk assets. The yield reached its highest level since early 2002, coinciding with the Federal Reserve's interest rate hike in September. Cowen cites historical trends, noting that the 10-year yield typically peaks between early October and mid-November during midterm election years, as seen in 2018 and 2022. He acknowledges that while the pattern is not exact, yields generally decline from mid-November through December. Cowen had initially set a soft target of 5%, which has been surpassed, suggesting a potential range of 5.4% to 5.6%. He expects peak anxiety around the Fed's meeting on October 28, where the likelihood of an interest rate hike dropped from 64% to 17.7% in a week. Cowen argues that rising yields are partly due to bond traders' concerns about insufficient Fed tightening. He believes the Fed can justify maintaining rates due to soft inflation and a weak labor market, highlighted by a September jobs report showing only 29,000 new jobs. A poor inflation report could trigger another bond selloff, potentially leading to a decrease in the two-year yield and less need for Fed hikes. Cowen predicts rates will begin to fall in mid-November, shortly after the midterms. While he did not mention Bitcoin directly, he noted that the rate trajectory should impact risk assets, including Bitcoin, which has recently reacted to yield changes.

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