{"id":67800,"date":"2024-05-02T17:55:51","date_gmt":"2024-05-02T22:55:51","guid":{"rendered":"https:\/\/olduvai.ca\/?p=67800"},"modified":"2024-05-02T17:55:51","modified_gmt":"2024-05-02T22:55:51","slug":"if-treasury-bonds-hit-5-youre-gonna-see-some-serious-sht","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=67800","title":{"rendered":"If Treasury Bonds Hit 5%, You’re Gonna See Some Serious Sh*t"},"content":{"rendered":"
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If Treasury Bonds Hit 5%, You’re Gonna See Some Serious Sh*t<\/a><\/h3>\n<\/header>\n
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Almost as if all of us Austrian Economists (read: any carbon based life form using common sense when it comes to finance) live in an echo chamber together, a\u00a0third<\/em>\u00a0expert I respect came out over the last few days and has warned that 5% on the 10 year treasury would be the breaking point for markets and the economy.<\/p>\n

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If my calculations are correct, when this thing hits 5%\u2026you\u2019re going to see some serious sh*t.<\/em><\/p>\n

Peter Schiff\u00a0now argues<\/a>\u00a0that the Federal Reserve and US Treasury are being forced to confront the reality that inflation is persistent, which has led to an increase in yields, recently reaching 4.7% on the 10 year, the highest since November.<\/p>\n

The thought process, for financial neophytes, is that bond traders will continue to sell bonds, driving yields up, in order to make it difficult for the Fed to cut rates \u2014 and essentially forcing the Fed to fight inflation head-on instead of capitulating to the economy and markets (should they crash).<\/p>\n

This follows Jack Boroudjian\u2019s analysis from last week, stating that rates will keep drifting higher and that 5% to 5.5% is the danger zone:\u00a0Yields To Trigger “Serious Earthquakes” Across Economy: Jack Boroudjian<\/a><\/p>\n

It also follows Harris Kupperman\u2019s similar take:\u00a0Bond Market About To Have An “Aneurism”: Harris Kupperman<\/a><\/p>\n

Put simply, the Fed faces a dilemma: it needs to raise rates to combat inflation and make Treasuries more appealing, but higher rates would exacerbate the already burdensome debt servicing costs and threaten industries reliant on borrowing. Or, to use the parlance of\u00a0my recent interview with Matt Taibbi<\/a>, higher rates simply serve up another day of \u201csh*t burgers\u201d to the economy, whereas lower rates act as rocket fuel for economic activity (and market confidence).<\/p>\n

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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

If Treasury Bonds Hit 5%, You’re Gonna See Some Serious Sh*t Almost as if all of us Austrian Economists (read: any carbon based life form using common sense when it comes to finance) live in an echo chamber together, a\u00a0third\u00a0expert I respect came out over the last few days and has warned that 5% on […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,431,534,32812,33286,20223,26572,3650,2721],"class_list":["post-67800","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-interest-rates","tag-monetary-policy","tag-price-inflaiton","tag-qtrs-fringe-finance","tag-quoth-the-raven","tag-treasury-yield","tag-us-federal-reserve","tag-us-treasuries"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/67800","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=67800"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/67800\/revisions"}],"predecessor-version":[{"id":67801,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/67800\/revisions\/67801"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=67800"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=67800"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=67800"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}