Below are the downside targets for the 3-month Treasury from the beginning of the Fed’s interest rate increasing campaign.
The downside targets have been adjusted for the March 21, 2019 peak at 2.49%.
If the current run of stability in rates is anything like the period of 2015 to 2016, we should see a sharp drop in rates as was seen in the period from September 12, 2016 to September 22, 2016. At that time, the 3-month treasury dropped from 0.37% to 0.18%, a decline of -51%.
Can the 3-month rate decline to 1.19%? It is a definite possibility and not out of the range of “normal” declines within a rising trend in the market.