The recent 25 basis point rate hike the Fed put in did little to nothing. Long end rates including the 10 year are rising sharply and beating the Fed to the punch. These hikes by the market indicate concern over the entire US debt and repayment structure. Tooo much debt at too high a rate equals more troubles for the Treasury to make ends meets. Bessent tried buying down rates, gave billions to Japan so they would not sell the US Bond and quietly buying the 30 year to replace it with 2 year bonds…All in all it is a mess that will soon lead the USD down, perhaps to the 80s.
A smart guy suggests buying TLT with the hope that the Fed will HAVE TO LOWER by buying the debt…that means printing the money. Maybe he is right. Those 5.3% 30 years will soar if rates drop so it is worth considering.
Interesting times.
Best,
Donn Marier
DM-Your Own CFO