Snip:
US yields are currently sitting at or near multi-decade highs across much of the curve and have edged higher since hostilities with Iran resumed. With the war now in its seventh month, many analysts are wondering whether the bond market might end up being the major constraint on US military ambitions.
It wouldn’t be the first time Treasures put a damper on moves by the administration of US President Donald Trump.
A few months into his new term, Trump introduced his Liberation Day tariffs, thus opening a trade war against the whole world from the White House lawn. It would take exactly three trading days for the 10-year yield to chalk up a gain of around 50 basis points, putting it on pace for its biggest weekly rise in a quarter century. The administration beat a humiliating retreat by canceling or postponing most of the tariffs.
This could prove to be America’s Achilles’ heel in the Iran war Many analysts believe the specter of inflation, and downstream from that, Treasury market turbulence, has already limited the scope of what Washington can do in the Middle East. With yields rising aggressively now, the administration may well end up being even more constrained.
Other way around, it goes from stocks to currency. Most of the economic malaise in the west since the 2008 crisis is because yields are too low, so people “invest” in ovious scams, like
And taking loans.
Essentially mis investing the material resources of those societies. That obviously can’t goon indefinitely, so eventually there needs to be a correction, yields rise, so investors sell stocks and buy government bonds/cash money.
but yields are rising because they are selling, getting cash money and doing something with those cash money, i don’t think japanese pension funds are getting ai pilled to go all in on nvidia from us treasuries
But they are equally misinvested in other shit. They are either buying goods and services causing inflation or sitting on it, or buying other currencies.
which would be seen as other currencies yields dropping like a stone, cause their markets are tiny compared to yen/dollar/euro, only chinese bonds did so. goods and services could be semi plausible, if it was just japan getting old and liquidating pension funds for their express purpose, but thats also not the case here
Good point. The people managing investments are not purchasing actual physical goods, or changing their consumption. But, what if some sort of Persian wizard removed 20% of all goods and services from the market, and the financial system spent a lot of money to cover it up. Eventually they can’t, because those physical goods are not there, but there is a money sink.