Let's put this in context. The "official" inflation rate in the US is 1.3%. The 10-year "risk free" rate is now 1.79%. That means investors are piling huge money into 10-year treasuries with a 0.49% real rate of return. They honestly believe that this is the best investment option at the moment. Better than stock, corporate debt, emerging markets, etc. (I'm not going to get into what the inflation rate is or isn't these days. For an alternate take on this topic, I encourage you to visit www.shadowstats.com)
Looking at the monthly chart above, the 10-year yield has diligently obeyed the declining upper channel for the last 7 years, most recently touching it in early 2014. It has steadily fallen since then and, if the trend continues, yield will now work its way down to the lower channel. Stockcharts.com doesn't give the option to adjust the vertical axis (or at least I'm not smart enough to figure it out), so I'm not able to show the projected path to the fullest extent. Based on prior trajectories within the larger pattern, I'm going to extrapolate the path forward, as I've shown with the green dashed line. The trend is your friend until it's not, so with that in mind, I'm going to predict a sub-1.0% yield on the 10-year sometime in the next couple of years.
What does this mean? It means something is seriously wrong under the surface. Investors wouldn't be pushing the yield lower if there were other, better investment options. It shows profound lack of growth expectations over the coming decade. Remember, investors are parking $ billions in these treasuries and getting a paltry real return of 0.49%. If inflation creeps up to just 2%, then the real return goes negative. As I've said many times in the past, the equity markets and debt markets are signalling two very different things. This dichotomy cannot last forever so something's gotta give.