You may not have noticed, but since President-elect Donald Trump's victory in November, the yield on 10-year U.S. Treasury notes has climbed more than 50 basis points, reaching 2.38%.

If it keeps going and tops 2.6%, that milestone will prove far more significant than the Dow Jones Industrial Average topping 20,000 or oil prices climbing above $60 a barrel, investment guru Bill Gross wrote in his monthly investor outlook for January.

That would signal the start of a long-term bear market in bonds, according to Gross, the Pimco co-founder, whose investing acumen earned him the nickname "Bond King" before he moved to Janus Capital (JNS) . The 10-year yield is a lending benchmark that influences interest rates on everything from auto loans to mortgages.

"Happiness has dominated risk markets since early November and despair has characterized global bond markets," Gross wrote.

Investors have moved from the relatively safety of government securities into equities that offer the promise of higher returns if Trump succeeds in stimulating growth and scaling back regulations that he says have hampered the U.S. economy.

"President-elect Trump tweets and markets listen for now," Gross said, but ultimately, further expansion outside of bond markets will depend on whether the real estate mogul and his Republican majority in Congress succeed in boosting economic growth from the 2% rate of the past decade to 3% or more, which would fuel corporate profits.

"I, for one, am skeptical of the 3% and more confident of the 2%," Gross said. "We shall see whether Republican/Trumpian orthodoxy can stimulate an economy that in some ways is at full capacity already. To do so would require a significant advance in investment spending, which up until now has taken a backseat to corporate stock buybacks" and dealmaking, he wrote. 

The longer-term challenges of an aging population, the loss of jobs to technological advances and high U.S. debt relative to economic output may no longer dominate news coverage, but they haven't gone away, Gross noted.

While hope for reduced regulations and lower taxes under a Republican administration have encouraged risk-taking, the trend raises the question of whether risk markets are now overpriced -- and Treasury markets underpriced, Gross said.

"That is a critical question for 2017," he wrote. Over the past three decades, the 10-year yield has had an almost linear decline, tumbling from 10% in 1987, but that trend is now at risk.

While the current top of 2.55% to 2.6% has held so far, if it breaks, "a secular bear bond market has begun," Gross said. 

"Watch the 2.6% level," he added. "It is the key to interest-rate levels and perhaps stock price levels in 2017."

The rise in the yield on the 10-year Treasury note is coupled with the Federal Reserve's decision to raise short-term interest rates by 25 basis points in December, only the second such hike since rates were cut to nearly zero in 2008.

The Fed projected as many as three rate increases this year, a signal that monetary policy committee members are optimistic about the economy even though inflation hasn't yet hit the central bank's target.

"Trump's policies may grant a temporary acceleration over the next few years, but a 2% longer term standard is likely in place that will stunt corporate profit growth and slow down risk-asset appreciation," Gross wrote.

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