nostr:npub1a2cww4kn9wqte4ry70vyfwqyqvpswksna27rtxd8vty6c74era8sdcw83a's latest newsletter made note on the ongoing carnage in sovereign bonds. I won't summarize the analysis or position, given it is a subscriber newsletter. But it is an interesting and meaningful debate as to the direction of interest rates. Related, there was a Barrons story this week about the labor market, noting its resilience as evidence to a likely soft landing (typical MSM garbage).

My contrarian view to that the labor market remains weak because excess liquidity still defines the economy. In other words, if central banks and government really want to bring price inflation under control, they need to destroy more demand and create more unemployment, such that monetary units come more in line with the scarcity of people's time and energy.

Applying this thought to the future of interest rates, they need to go up more. And sovereign debt needs to go down more. The question is "when" and "how violently." I think central banks will pause and expand their balance sheets sooner than people think, likely in response to crisis. But I also don't think they can go on doing this too much longer, before trust is completely lost and collapse occurs.

So, is sovereign debt a good buy? I suspect it is a matter of timing, but "no" longer term.