10 year yields are breaching their resistance trends this week. Whether the market pulls a 94', a 04' or something worse or in between is up to the larger powers that be. You could say the equity market titrated the inflation expectations of 2004 with very little collateral damage. In essence, it went sideways for a number of months within a narrow range. As described in my previous post, the equity markets did not respond as well in 1994 to the Feds more aggressive transition to fighting inflation expectations.
Based on the anecdotal remarks of Walmart's CEO and my heating oil salesman - the risk is towards a more contentious market in the intermediate time frame.