Unfortunately this website won't go past 20 years for 30Y yields, so I'm posting 10Y
Anyways, the notion that the Fed is done at 5% is pure fallacy. We're seeing inflation we haven't seen since the 80's, and a lot of it is structural. Aside from labor shortage and Russian oil, we have way too much deficit spending by the government and the Fed balance sheet exploded during the COVID QE.
Having taken out college loans at 10% interest, I wouldn't be surprised at all if yields went above 10%. People pegging the peak at 5 or 6% are gonna be in for a freakin' shock. I also expect rates to stay high until the Fed balance sheet comes back down, and we're talking 10 years or so because they're under water on all of the MBS they hold.
That doesn't mean the stock market has to go down though, the stock market went up in that era aside from the '87 crash. Focus in inflation trades, stay away from bonds, especially TLT, lol.
Note: I realize TLT is 20Y+, but no historical charts available for anything besides 10Y
Anyways, the notion that the Fed is done at 5% is pure fallacy. We're seeing inflation we haven't seen since the 80's, and a lot of it is structural. Aside from labor shortage and Russian oil, we have way too much deficit spending by the government and the Fed balance sheet exploded during the COVID QE.
Having taken out college loans at 10% interest, I wouldn't be surprised at all if yields went above 10%. People pegging the peak at 5 or 6% are gonna be in for a freakin' shock. I also expect rates to stay high until the Fed balance sheet comes back down, and we're talking 10 years or so because they're under water on all of the MBS they hold.
That doesn't mean the stock market has to go down though, the stock market went up in that era aside from the '87 crash. Focus in inflation trades, stay away from bonds, especially TLT, lol.
Note: I realize TLT is 20Y+, but no historical charts available for anything besides 10Y
評論:
And note that this makes me bearish on bonds, not necessarily the stock market.
評論:
China is forcing companies like CATL and JD to cut prices to spur growth. More inflation coming. No other reason for JD to subsidize customers unless the govt is forcing them to.
Fed balance sheet, their website so you know I'm not making it up:
www.federalreserve.g...bst_recenttrends.htm