The intensifying bond market crisis is the final warning that the Federal Reserve has learned absolutely nothing from the disaster of 2022. We are watching Treasury yields surge at the same time that oil is sitting above $100 a barrel which is a recipe for a total currency collapse if the Fed keeps pretending that rate cuts are still on the table. This matters because when the bond market loses faith in the central bank the interest rates on everything from your mortgage to your credit cards start to spiral out of control regardless of what the bureaucrats in Washington say.
The US bond market crisis is intensifying.
While everyone is focused on AI and the Iran War, the US bond market is in a complete meltdown.
The 30Y Yield is now above 5.00% and the 10Y Yield is nearing the pivotal 4.50% level, which resulted in President Trump's "90-day tariff… pic.twitter.com/azEUScgw11
— The Kobeissi Letter (@KobeissiLetter) May 12, 2026
I hate to gloat, but I told you, I told you, I told you.
The Fed is now stuck. They lowered rates under pressure when they should never have come down. Powell & Pals should have let the economy go into a quick recession back in 2023 or 2024, which would’ve ended the inflationary… https://t.co/gyPQy4gp3J
— Uncle Milty’s Ghost (@his_eminence_j) May 12, 2026
The Fed is essentially trying to choose between a massive stock market crash or allowing runaway inflation to liquidate the savings of every American family just like they did during the last cycle. If they don’t pivot back to raising rates immediately the market will do the work for them by dumping the dollar and leaving the average worker to deal with a cost of living explosion that will make the previous 3 years look like a warm up.