Debt is the blob that’s going to swallow the global financial and economic system. From Bill Bonner at bonnerprivateresearch.com:
(Source: Getty Images)
Bill Bonner, reckoning today from Poitou, France…
U.S. bond yields hit 17-year high following Federal Reserve’s interest rate stance
…two-year U.S. Treasury note yield reached 5.2% …, marking a 1.4 percentage point increase since May and its highest level since 2006. The 10-year Treasury note yield is also nearing a 16-year high of 4.5%.
However, due to ongoing economic strength and a tight labor market fueling persistent inflationary pressures, the Federal Reserve is expected to continue its tightening policy well into 2023. This could potentially lead to further decreases in bond prices as markets anticipate a higher peak in the federal-funds rate this year and fewer cuts in 2024.
Today, we will try to put this in perspective. Where are we in the Inflate or Die story? What chapter? What page?
Muddy Waters
We are still in a transition period. From the bull markets of 1980 – 2020, we are now entering into bear markets. Or so we believe. Bonds topped out with a yield of only .11% on the 2-year Treasury note in July 2020. Now, the rate is nearly 50 times higher. Stocks reached their peak in December 2021. Since then, they are cheaper, but less dramatically so.
