The national debt is headed significantly higher, and so too are interest rates. The stock market likes Trumponomics, the bond market doesn’t. From Wolf Richter at wolfstreet.com:
Traders got even more nervous on Friday, after having been twitchy all Thursday, and they alleviated this condition by selling government bonds.
In July, government bonds were sitting ducks with their low yields, and perfectly ripe for a good plucking. This plucking has now proceeded relentlessly and has entered its sixth week in a row, after an already rough four months.
The price of the 10-year Treasury note swooned on Friday. The 10-year yield, which moves in the opposite direction, rose 6 basis points to 2.47%, the highest yield since June 2015. Since early July, the 10-year yield has jumped by 1.08 percentage points! That’s a 77% move (via StockCharts.com):
The 30-year Treasury yield jumped 7 basis points on Friday to 3.15%, the highest yield since June 2015, which elegantly crowns a 50% move in six month (via StockCharts.com):
US government bonds are considered among the most conservative investments in the world because they’ll never default. They will always get redeemed at face value since the government, via the Fed, can always print enough money to take that risk off the table, though the bonds’ purchasing power might get crushed in the process.
To continue reading: Government Bond & Mortgage “Carnage” Enters Sixth Week
