The financial markets are in a state of flux, with the 10-Year Treasury yield showing signs of going off the rails, potentially breaking through 4.8% and aiming for 4.9%. It’s a scenario that has me on edge, especially with tomorrow’s CPI release looming large. This data could very well dictate the next move in this high-stakes game of yields.
Peter Schiff, always vocal about economic trends, has pointed out something that’s flying under the radar: the yield on the 10-year Japanese government bond (JGB) is inching towards 1.25%. He predicts it’s on a path to 1.5% and then 2%. Once it crosses that 2% threshold, we could see JGBs crash, with yields soaring. This isn’t just a local issue; it’s like watching a storm gather that could unleash a financial tsunami, impacting not just Japan but potentially crashing U.S. financial markets too.
Adding to this tension, the yield on the 30-year Treasury has just hit the 5% mark. It’s a number that sends a chill down my spine, knowing that the 10-year isn’t far behind. Schiff warns that this is merely a pit stop on the way to 6%, and then possibly 7%. It’s a trajectory that’s alarming, especially when Wall Street tries to spin this as a positive development due to economic strength. But let’s be real; these rising rates are more about the U.S. grappling with soaring debt and rampant inflation.
This situation is more than just numbers on a screen; it’s about the real-world impact on savings, investments, and the broader economy. As yields climb, borrowing costs rise, squeezing businesses and consumers alike. And with Japan’s bond market potentially on the brink, the ripple effects could be catastrophic, sending shockwaves through global finance.
Sources:
https://x.com/leadlagreport/status/1879236546127409474
https://x.com/PeterSchiff/status/1879197007518298576
https://x.com/soldatthetop/status/1879242451074117820
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