US interest rates target long term 14.1% United States 2 Year Government BondsTVC:US02William_PlayfairAt present, the Point & Figure (PnF) vertical count, using a 0.1 box size on a close-only basis, projects a very long-term target of 14.1% on the US 2-Year Treasury yield. One of the reasons I pay close attention to the US 2-Year yield is my belief that the market leads the Federal Reserve, not the other way around. In particular, I believe the Fed largely follows the direction of the US 2-Year Treasury yield, which acts as the market's collective expectation of future monetary policy and inflation. By the time the Fed formally changes rates, the 2-Year yield has often moved well in advance. Years ago, a Fed Governor publicly acknowledged that the market frequently leads the Fed's decisions rather than simply reacting to them. Whether intentional or not, that admission reinforced a view I had already held for many years: the bond market often tells us where policy is heading long before central bankers officially act. If that relationship continues to hold, then PnF analysis of the US 2-Year yield can provide valuable long-term insight. Point & Figure charts do not tell us when a target will be reached, only that the underlying supply and demand dynamics imply a target exists. In this case, the chart suggests that 14.1% remains a possible long-term objective, particularly if inflation were to re-emerge as a major problem and policymakers were forced into another aggressive tightening cycle. What makes this especially interesting is that the same methodology also identified the potential for yields to fall towards the historically low levels we eventually experienced. Looking back 20 years, very few market participants would have believed yields could decline as far as they did, yet the monthly PnF chart projected that possibility well in advance. The chart did not predict the timing, but it correctly identified the direction and scale of the move. This is why I find Point & Figure analysis so powerful. It removes much of the day-to-day noise and focuses on the bigger structural moves that most market participants cannot yet imagine. A note on the chart presentation: the green and red lines are the standard 45-degree PnF trend lines. Depending on your screen size and chart settings, they may not visually appear to be 45 degrees. This is simply a scaling issue caused by fitting decades of monthly data onto a single chart. If the chart is resized correctly, the trend lines retain their proper PnF geometry.