Many people ask why.
The short answer is because nothing stops this train.
The longer answer is that 1) the rest of the world isn’t buying as many Treasuries anymore, 2) investors prefer cash to Treasuries, and 3) there are now balance of payments issues and so the United Stated has EM-like characteristics where stocks and bonds can struggle together due to capital outflows.
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The Emerging will continue until the money improves
1+1=2 🗽
Any interpretation of gold being down at same time?
When broad money contracts, the price of everything falls. And when people reduce leverage en masse, broad money contracts. And when uncertainty across the markets spikes, people reduce leverage.
This PROBABLY won't extend to consumer goods due to the price effects of tariffs. But it could if the feedback loop gets going, at least until the money printer goes "Brrrr" to fill the hole, AND the fiscal policy pumps that money into the real economy.
Without that second part you just get a repeat of the 2010s.
Yes, but if the rest of the world aren't buying as many treasuries in a traditional sense, what happens when they rotate out of their local fiat into US stablecoins? Tether et al are just dollar denominated debt - treasuries? And with 250,000 new adoptees every day are we going to see an explosion of liquidity in defi in the coming weeks/months/years that is laregely secured indirectly by stablecoins (treasuries)?
Do you think its possible China started dumping treasuries? That seems like their 'trump' card to tell trump to stfu and heel
Perhaps they want to show how easily they can control our rates by selling off a little bit of their stack
It seems more likely to be the UK, who holds about as many as China. may be worth keeping an eye on TIC data over the next few months to see that play out.
I was under the impression no one wants long dated treasuries.
Regarding 1)
The rest of the world is not just losing confidence in US stocks, it's losing confidence in the US.
🫂
Thanks for explaining Lyn, I was too afraid to ask such a simple question.
