Fat Bastard knew.
Bond traders knew.
The Asian traders thought they knew.
European traders are still saying what the f***.
Ignoring the so-called “tariff” relief announcement today, the market instability in American sovereign debt is not healthy for the US economy, a poor outcome for the average American retiree, and the violent actions in the bond market should be of massive concern.
But it will not matter until it does.
Last night, it mattered once again.
For example, without rehashing the long thread on a mystery Japanese bank liquidating US Treasury instruments causing the 3 month/10 year spread to blow out to infinity and beyond, check out the 2s/10s spread last nigh at 9:11 pm ET:
After all the drama last night, including the 30 year blowing past a 5% yield, the Trump move to relent on tariffs for 99% of the nations except for China led to rates easing, but still uncertainty reigns supreme.
Here is the “belly” of the US Treasury yield curve, plus the US 10 year yield with today’s blowout high yields:
To call this “sub-optimal” would be a gift to the bond Gods.
In reality having 10, 20, 30+ basis point swings on US Treasury yields makes one think we view our national debt instrument, you know, the one we replaced the gold standard with in 1971, trade like a shitcoin that Saylor or Mark Cuban dreamed up while sitting on their golden thrones.
Internationally speaking, this will end poorly and in the end, more nations will avoid the US debt instruments as much as possible.
Especially those countries that do not kiss the ring of America’s leadership.
Like China.
Buckle up, it’s about to get even more insane between now and May.
