Coronavirus obviously ushered in an era of record low rates.  The ongoing challenges and uncertainties are fairly well understood.  They have a wide spectrum of possible outcomes.  As far as we can see at the moment, the baseline outcome involves permanent job losses on a large enough scale to imply a broad shift in economic output.  In turn, that shift implies that rates could remain low for a long time or even move lower. 

That's one of the possibilities, at least.  It's the basic bullish case for rates going forward and it's easy to defend--perhaps too easy.  In these situations where broad themes seem relatively logical and probable, financial markets have a knack for moving in a counterintuitive way.  

It might sound like I'm warning you about a counterintuitive move toward higher rates, but--like anything in financial markets--this series of events isn't guaranteed.  It may not even have much more than a 50% probability, but when it happens, it's memorable enough to make it feel that way.  Rather, what I'm saying is that "remember... these things can happen."

In other words, rates are low.  After a little scare last week, they've trended lower again this week.  All of this is fairly logical--logical enough that everyone else can see it too. The implication is that we need to constantly be asking ourselves "ok, was that it?  Was that the final push toward lower rates in the bigger picture?"  

When the time comes to get really serious about those questions, you'll know it.  It will look very different than last week's technical correction.  Selling will be sustained.  It will be bigger.  And it won't give way to nice little bounces into nice little trend channels like the one we've seen this week.

So what am I telling you to do?  Enjoy the low rates we have today.  Yes, they could go even lower by the end of the year (and over even longer time horizons, we're nearly certain to see new record lows).  But for now we're feeling out a relatively broad sideways range and waiting for bulls or bears to try to take the lead.  The emergence and confirmation of this week's rally trend simply means the broader sideways range remains intact.