There is something going on with the long bond, that’s for sure, but what is it really? The answer is surprisingly simple, and it also explains why the last 30-year Treasury auction held this week was said to have been a mess. That was more about what everyone says than what’s happening and why. Eurodollar University&#x27;s Money &amp; Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU I’ll also be active on Bravais Social - a new AI-centered social network designed for professionals and knowledge workers. The platform aims to bring together a wider range of tools and functionalities tailored specifically for professional interaction, research, and knowledge exchange in one place. You can find me here: https://bravais.social/profile/edu

Something Really Strange Just Happened at the 30-Year Bond Auction

Eurodollar University

The 30-Year Long Bond price at its highest yield since 2001, so over a quarter century, which has to mean something, right? What people take it to mean is that long bond rates continue to go up and therefore must be a signal, especially with short-term rates starting to move down again and the yield curve steepening. The long bond rate going up must be a signal about something. Markets' vigilantism waking up, inflation risk, the Fed not doing its job the way it used to do before,

Kevin Warsh being too wishy-washy, the removal of forward guidance, a number of different things. But none of those are actually true. We do know what's happening on the yield curve and we can see what's happening on the yield curve. In fact, I'm going to show you what's happening on the yield curve that will explain why the 30-Year Long Bond rate is going up, even though the rest of the economy, the rest of the marketplace is going in the opposite direction from inflation, including other central banks and the bill market. We've got a lot to get into here.

So we'll start with the 30-Year Long Bond. The auction was yesterday, like I said, highest yield since 2001, so 25 years. People going nuts about this. We've already talked about how the 30-Year Long Bond market rate is up most since 19 years, 2007. So the idea is that this must mean that the U.S. government is finally reaching the point where deficits and debts actually matter.

And therefore, the canary in the coal mine for bond vigilantism, the final return after decades of being missing a bond vigilantism, has to be the 30-Year Long Bond because it can't be the rest of the curve because the rest of...

Something Really Strange Just Happened at the 30-Year Bond Auction

Read the full transcript

The candid version is on a podcast,
not the earnings call.

Something Really Strange Just Happened at the 30-Year Bond Auction

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.