Trading Insights 05/19/25

Chart of the Day 📈 5/19/25: Interest Rates in the Post-"AAA" Age

Mike Larson | Editor-in-Chief

The “AAA Age” is over.

Moody’s Ratings just stripped the US of its last top-notch credit rating, citing ballooning government debt and budget deficits (plus other factors). You can read more about what happened and why in my MoneyShow Market Minute column from this morning. Here, I want to talk about what it means for interest rates.

Check out the MoneyShow Chart of the Day – the CBOE 10-Year Treasury Note yield Index going back 12 months. TNX tracks the 10-year yield with a decimal place shift. In other words, a value of 44.41 equates to a yield of 4.441%.

CBOE 10-Year Treasury Note Yield Index (TNX)

You can see that yields have chopped around a lot in the past year. But in the shorter-term, TNX broke above the 50-day moving average AND minor overhead resistance at $44.

This chart doesn’t yet incorporate the further rise in yields today...and the close later will be important. If the $45 level gives way, it opens the door for a move to the January highs around $48 (a 4.8% yield).

If you’re trading bonds in any format – bond futures, futures options, or via Treasury ETFs like the iShares 7-10 Year Treasury Bond ETF (IEF) or iShares 20+ Year Treasury Bond ETF (TLT) – pay attention to these key levels. They could be ones to use as stop-out or trade-entry points, depending on what happens in the first one-two trading days after the Moody’s downgrade.

Vera: What the US Debt and Deficit Burdens Mean for Markets, Investors

How will the US’ growing debt and deficit burdens impact markets — and how can you adapt as a trader? Kathryn Vera of StoneX and I spoke about that at the 2025 MoneyShow Masters Symposium Miami last week. Check out what she had to say HERE. It’s critical intelligence in light of the Moody’s downgrade late Friday.