US and Iran Renew Fighting, Global Bond Rout Deepens
US bond yields have risen to fresh highs, with the 30-year yield nearing 5.30%, as unresolved issues with Iran push crude prices higher and some Federal Reserve officials signal readiness to vote for rate hikes. This move is partly attributed to increased expectations of rate hikes, a significant rise in term premia, and global fiscal concerns, particularly in Europe and Japan.
The surge in bond yields poses a critical test for risk assets, especially equities, and raises questions about the sustainability of government debt at these levels, potentially impacting global markets and fiscal stability worldwide.
The episode also covers stock pullbacks as buying opportunities, the US-Iran status quo, war and tariffs driving US yields, potential long bond underperformance in downturns, AI's impact on midterm affordability, Venezuelan oil's role in SPR replenishment, AI constraints preventing overbuild, Treasuries as a safe haven, August job additions, higher costs triggering layoffs, and the Fed's potential failure to hike.
BOND MARKET US TREASURY YIELDS FEDERAL RESERVE INTEREST RATES INFLATION
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