Bond Market Panic? Treasury Yields Hit 19-Year High
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Well, in the immortal words of Ron Burgundy, well, that escalated quickly. Yeah, 30 year treasury right now, the yield is top 5.18. We have not seen that yield since 2007. 19 years, we haven’t seen the third year trade that high 10 year 4.685.
sooner rather than later at this rate, we’re gonna probably seeing mortgage rates at around 7%. So we’re seeing a bit of a bond market collapse. My thoughts, my thoughts on this, in my humble opinion, it’s got a long way to go. If we were actually not,
you know, the Fed doesn’t step in and start buying up bonds and keeping the rates artificially low. A natural settling point for the United States and our debt. I’d see probably around now for a 30 year. Seven and a half, 8 % at least. Well, understand your Trump came out with the hottest economy in the world and all these things. Whoa, whoa, whoa, whoa, Schmuck out.
We’re 40 trillion dollars in debt. Well, what do we do? This is not like a casino in Atlantic City that you can foreclose on and turn over the keys. Are we going to turn over the keys to Yosemite?
Is that what we’re to do to people that buy our debt? No, that’s not going to happen. Not to mention the fact, could be me calling me crazy, but one would think that your rate of return on your dollar should be equal to what the inflation rate at the decline in the value of your dollar.
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I know they’re telling it’s 3.4 % inflation. It’s much higher than that. We all know this. Anybody with half a brain knows this. So what’s gonna happen? I don’t don’t know. Kevin Warsh stepping up to the plate at this point in time. What I would like to see happen is for us to have a come to Jesus moment.
as far as Washington DC is concerned and start cutting, reining in spending. This nonsensical $1.5 trillion military budget and all this other crap. You just gotta start being fiscally sane. You do understand we still have over $10 trillion in debt we have to roll over this year. Meaning we got to
basically borrow more than $10 trillion this year and then some at higher interest rates. Could be much higher interest rate. You want to just see how stupid just these people are at the Federal Reserve. You remember, you know, long time ago in a galaxy far, far away during COVID, remember when mortgage rates were down under 3%. Why the flippity-flappin’ flu wouldn’t the
the Fed and our Treasury work together to refinance all of our debt at ultra low rates. I don’t know. Could be me calling me crazy. But that seems to me like the intelligent thing to do. No, no, they didn’t do it. Anyway, this also as well, another aspect of this.
in its song there, tomato, tomato, let’s call the whole thing off, Iran. If you don’t think that Iran is watching our bond markets and well aware, if we conduct this massive military operation in Iran, like Trump said he was going to do, but then the Gulf states told him not to do it. So he’s holding off again. We do that.
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Yeah, the rates are gonna get much much higher. You’re gonna continue to see that sell off. I don’t think you’re gonna have that flight to quality. I really don’t. I mean you might for a short period of time, but when push comes to shove, it’s gonna be enormously detrimental to the global economy and it’s gonna take a lot to come back from that. This is where we’re at, folks.
It’s frightening in the sense that because of these higher rates and the people that are in play in Washington, D.C., I don’t think I don’t think that you’re going to see the type of cuts are necessary. But you’ll probably see the way the wind is blowing as far as politics are concerned is I think you’ll probably see higher taxes in some way, shape, form coming down the pike. I mean, you’re not going to see it.
Trump tried it with his tariffs. You’re gonna have Democrats push him to institute a corporate tax. You gotta find some money somewhere here because again, you take a look at every single budget. I told you this was gonna happen to all the budget projections that they were giving based upon the big beautiful bill. They’re all thrown out the window now.
None of those numbers make any sense based upon bond rates where they’re at right now and no end in sight.
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Again, walking away.
from the Iranian situation, that would help. But again, right now the Iranians are demanding that we rebuild the country. They’re demanding reparations, we have to rebuild the country or the other rich states there within the area. And they keep putting that in their demands and Trump is a hard no on that. But that would help.
That would most certainly help. Right now, again,
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Things, like I said, that escalated, things could get much worse very, very quickly. And we need to pay very, very close attention to this. Things start to spiral. You start to see 30 year, 5.5, 5, it’s a lot of problems gonna ripple through our economy, but the global markets as well.
already seeing foreign nations, Japan has been selling off our debt. know that China has been selling off our debt. And you know, that doesn’t make them bad guys. It makes them smart.
It’s it’s it’s dead money at this Yeah, I’m gonna lend the United States government for 10 years and get a return of you know, four point six Seven nine. I’ve lost money there
I’ve lost money, why would I do that? again, insurance companies, institutions that have to hold cash and cash equivalents, that’s keeping this whole thing moving, quite frankly. Because again, do you wanna lend the United States government money at those rates? I know I don’t.
Watchdog on wallstreet.com.
