War Turns Bonds Into Biggest Losers, 14% Loss
From Waterloo to the Iran conflict, the pattern hasn't changed. When governments go to war, bondholders pay. New research from Northwestern, Stanford, Columbia and UT Austin: 300 years of data, 14% average real losses in the first four years of war. Bonds weren't just a bad hedge.. They were the worst-performing major asset class. Link in the comments 👇 #Bonds #GovernmentBonds #Gilts #Treasurys
Phase 2: Volatility Surges, Credit Spreads Finally Widen
Phase 2 - the return of pre-Covid risk off behavior as volatility explodes and credit spreads finally widen.
Liability Maneuvers Cut Bankruptcy Recoveries Nearly in Half
Sobering new read: Liability management maneuvers (LME) often fail to protect L-T value. Per @FitchRatings firms that undertook LMEs btw 2016 & H1 2025 before filing bankruptcy experienced recoveries for first-lien debt of ~39% vs recoveries of ~68% for firms w/o...
Treasury Data Shows U.S. Government Insolvent in FY2025
My take in @asiatimesonline on US debt: “The US gov't is insolvent. That’s not hyperbole — it’s the conclusion drawn directly from the Treasury Department’s own consolidated financial statements for fiscal year 2025, which was released last week to near-total media silence.”...
Rising 10‑Year Yields and Oil Prices Highlight Def
Yes, indeed. 10-year yields are higher. Oil is materially higher. On the deficits side: I’m old enough to remember DOGE… https://t.co/9uWJASUd8q https://t.co/K8XMoJFshw
10‑Year Treasury Yield Signals Oil’s Impending Downturn
Sec. Bessent, February 2025: "Judge us by the 10y UST yield." 10y UST yield (blue, RS) v. oil, since Bessent said that 👇 "3 Arrows" about to turn into "0-for-3 Arrows": https://t.co/goqhygmgv6
Rising 5% Breakeven Inflation Threatens S&P Valuations
Bond markets have rapidly repriced near-term expectations for U.S. inflation in response to surging commodity prices. The implied 1-year breakeven inflation rate is now above 5% for the first time since 2022. Elevated bond market-implied inflation expectations may present a problem...
Unemployment Rate Drives 10‑2 Yield Curve Movements
The most correlated macro data that explains the 10-2 yield curve is the unemployment rate. Why? The short end drives most of the movements in the curve, and employment heavily influences the short end via Fed policy. This relationship goes...
Inflation Fears Undermine Bonds' Traditional Safe‑Haven Appeal
"bonds—often a place of safety in times of market turmoil—have offered no relief, hit by worries that resurgent inflation will keep interest rates higher than expected and undermine the value of their fixed payouts." https://t.co/acyJLqVIXP https://t.co/7yOQbeNrn2
Fed Chair Switch Could Trigger Unexpected Pivot Amid Rising Inflation
Powell out in May. Warsh in. Market is pricing hikes. New chair may cut. The wildcard nobody's discussing: what if the Fed pivots just as inflation re-accelerates? One transition. Two completely different outcomes. $SPY $TLT https://t.co/zmsbBtchWk
One‑Year Inflation Swaps Hover Near 3%, No Panic
No major inflation scare yet... 1yr inflation swap only about 3%.. not alarming by historical trends Torsten at Apollo https://t.co/YfD4ihEjtb
Bond Market Squeezes Yield Expectations, Proves Wrong
2Y yield: 3.89%. 5Y yield: crossed 4%. Everyone was positioned for rate cuts. Everyone was wrong. Bloomberg calls it the biggest positioning squeeze in years. The bond market just delivered a reality check. $TLT $IEF https://t.co/jyYH8ebPrR
Yield Spread Peaks, Prompting Duration Risk Exit
3m10y yield spread 71bps... highest since July 2022... time to step out on the duration-risk curve? $AGG https://t.co/ozSwbxzLA4
Eurozone Borrowing Costs Spike over Iran Shock Fears
Eurozone borrowing costs soar on fears of fiscal hit from Iran shock via @FT https://t.co/QuVa5RF5wm
Global Public Debt Hits Record, Equals World GDP
International Monetary Fund: Global public debt has risen to a record level - nearly 100% of global GDP. https://t.co/H6FXJN78RZ
Rising Yields and Growth Fears Prompt TLT, SPY Sell‑offs
10Y yield at 4.44%. Highest since July 2025. Rates rising while growth fears mount. $TLT sellers and $SPY sellers agree on one thing: neither wants to own the future right now. That's a problem. https://t.co/lYjNri1VOz
Bonds Outpace Stocks, Signaling New Bullish Hard‑asset Era
Same Story - One month Bonds $TLT -5% vs Stocks $QQQ -7% Last 20 years, equities risk-off + geopolitical events = bonds rallied / with higher prices. Game changer, since 2022 this has not been the case, a significant -...
Fed Futures Show 28% Chance of October Hike
Fed Fund futures market is loose.. now just a 28% chance of a hike by October https://t.co/xszONB6nqL
War Risks Renew Bond Market Crises Across Europe
The last time we had a supply shock and oil prices rose - in 2022 - Italy and Spain got the ECB to cap their yields to survive and the UK bond market blew up in the LDI crisis. If...
Short‑term Yields Drop, Long‑term Rise; Gold Steadies
What was equally intriguing in Friday’s trading was the unhinging of the short end of the curve from the long end. The 2-yr yield fell by 7.4 bps to 3.91% while that of the benchmark 10-yr rose by 1.6 bps to...
Market Slashes Feb Rate‑cut Odds; Fed Put Dead
The market was pricing a 100% chance of rate cuts in February. That number is now 16%. The Fed put is dead.
Long‑duration Treasuries Matching S&P Returns Signals Cycle Shift
Long duration Treasuries performance now roughly matches the performance of the S&P 500 from July of last year. Think about that - duration is performing like stocks. That's a cycle shift starting.
When Duration Shifts, Rates Suddenly Matter
The “rates don’t matter” crowd always disappears when duration starts moving. Watch $TLT. Watch $HYG. Equities can pretend yields are irrelevant… …right up until refinancing becomes a math problem. https://t.co/7BiLk7apui
Iran War Sparks Global Stagflation, EM Rate Hike Pressure
OUT NOW - Former PIMCO Sovereign Credit Head on Iran War's global stagflation shock & risks for sovereign bonds. EM central banks don't have luxury of "seeing through" $100 oil - many will feel pressure to hike Apple 🔊https://t.co/FbjlbTwSHF Spotify📽️https://t.co/BWmky8uYIF https://t.co/eMPzAa5H18
High Inflation Dem
If CPI were to trend up to 5% over the next year in the unlikely event that rbob futures kept rolling up to the current spot price...what is the 10 year yield and what has to happen to SPX earnings...
U.S. 10‑Year Treasury Nears 4.5% Threshold
The other chart we all gotta check daily. 👉 U.S. 10 Year Treasury 💥Almost hit 4.5% today😦 https://t.co/DVVhNkPrqm
6.64% Rate Threshold Determines Mortgage Demand
6.64% has always been my line in sand for rates when they tick higher from here demand slows when they go lower toward 6% things improve. Hug a mortgage spread today https://t.co/DeRZntaHsC
BoJ Must Emergency Hike to Halt JGB Steepening
genuinely think the BoJ needs to emergency hike. don’t toy with the idea of shorting oil futures (you don’t have the juice for that). Ueda—the JGB steepening can end if you have the courage to do what’s right. https://t.co/cHO1FRRfAf
STIRs Reveal Uncertainty: Inflation vs Growth Slowdown
Not often you see STIRs trying to price hikes and cuts at the same time, but that is the current level of uncertainty. What will dominate in the next few months, inflation or a growth slowdown? Get...
5s Belly Pressure Rises as Back Side Flattens
And finally looking at the broad curve, belly (5s) has been under pressure past few weeks mostly driven by the flattening on the back side. Not a fan of 5s generally but it has cheapened a bunch and is...
Iran Oil Embargo Threatens US Treasury Basis Trade
We need to embargo Iranian oil to end this war. Biggest risk from that isn't catastrophically higher oil prices, but vulnerabilities in US financial markets due to the basis trade in the Treasury market and private credit. Those are our...
5‑Year SOFR Swap Spreads Dip Below
5y SOFR swap spreads have been heavy lately and just narrowed below -35 bps. Tactically good level IMO esp with the possibility of reg relief soon https://t.co/fjvHI7HVCz
Iran War Scenarios Shape New Fed Policy Outlook
Three scenarios for the Iran war and what they mean for Fed policy under new leadership. Plus eight key takeaways from the latest FOMC meeting. 🟢 Open https://t.co/Tx6udRxjvm
Steepener Trade Finds Relief as Front‑end Yields Rise
The UST 2s5s steepener has been my 'white whale' trade the past year, facing constant pressure from shifting macro drivers. It was first flattened by the AI disruption trade, then crushed by the surge in front-end yields following the outbreak...
Bond Yields Surge Globally as Japan Joins US/EU Breakout
Global Bond Yields continue to ramp higher alongside #Quad3 INFLATION Japan's 10yr ramped +11bps (thats a lot in a day) today joining the breakout in European and US Yields
Breakout Signal Sparks Record-Breaking Bond Volatility Surge
Our Breakout Signal in Bond Market Volatility has turned out to be one of the fastest ROC ramps in the history of me modeling it https://t.co/NsHzTPL9fS
Middle East Turmoil Strains $30tn US Treasury Market
Supply Chain risk is financial risk. “The $30tn US Treasury market is showing growing signs of strain, as turmoil in the Middle East drives swings in bonds that underpin the financial system. The ease of trading in the world’s biggest...
Yardeni Predicts Fed Will Hold Rates Steady All Year
Ed Yardeni tells CNBC he expects "none and done" from the Fed this year—no rate hikes ahead. https://t.co/Ml4LwB5aky
Jefferson and Barr's Speeches Raise Fedlock Hawkishness
Today's policy speeches from Jefferson and Barr continue to push the Fedlock hawkishness measure even higher. https://t.co/PYi7b3edxv
Composer Outperforms TIP in Replication Symphony
Been a while since I pulled this chart up....but this is my TIPs replication symphony on Composer plotted vs TIP https://t.co/6sUc1nkdUT https://t.co/msvzs0T9F1
5s30s
5s30s just took out the low from Monday. Back end flattening aggressively post auction https://t.co/KwTSaaxDhY
JPMorgan Unveils CDS Basket to Short Major Tech Debt
JP Morgan has launched a basket of credit default swaps designed to let hedge funds bet against the debt of $GOOGL, $AMZN, $ORCL, $META, and $MSFT 👀 https://t.co/snSNwBvm2p
Hormuz Closure Likely Drives 10‑Year Yields Higher
As long as Hormuz stays closed (which is highly likely near term), 10y UST yields will likely keep rising until either Fed or Treasury are forced to inject USD liquidity (into an oil spike & increasingly fracturing global supply chains)...
US 10‑Year Yield Climbs to Over 4.40%
Of note: Up 7 basis points so far today, the yield on the US 10-year government bond is currently trading above 4.40%. #economy #markets #bonds
10‑Year
10-year yield was sub 4% at the start of the war. Now it's over 4.4%. Worst month for $TLT since December 2024 https://t.co/OmX97S6MQ1
Weekend Angst Pushes 2s and 5s to Daily Lows
2s and 5s low of the day before the 7yr auction. Not too surprising after two tailing auctions but obviously weekend angst major driver.
2‑Year Yield Surpasses Fed Funds, Signals No Cuts
The 2-year Treasury yield (blue) is now > the Federal Funds Effective Rate (red) and CPI (green). If you believe the 2-Year leads the FFER, there's less likelihood of a rate cut anytime soon. https://t.co/73ZCycQNlj
5‑7‑Year Treasurys Historically Yielded 6‑6.5%
Back in the day, on average, you could get 6-6.5% on 5-7yr Treasurys @soberlook https://t.co/EGLX7QmA3x https://t.co/rb6v4PeHGs
One in Five Tax Dollars Go to Debt Service
"For every five dollars the government receives in tax revenue, one dollar is spent on servicing the national debt" https://t.co/GZLf2MrQBV https://t.co/2mBzfPVgm2
Long SOFR Futures Cheap, Expect No Rate Hikes
Now that cuts have been completely priced out through late 2026 into 1H 2027, long SOFR futures are extremely attractively priced. I do not believe hikes will happen as that would twist the knife into a global recession, so therefore...