Luke Gromen: UST market could face dysfunction before tighter conditions affect corporates - Traders Union
Luke Gromen: UST market could face dysfunction before tighter conditions affect corporates - Traders Union
Source: Traders Union
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DW NOTE
Gromen has identified the sequence that matters: Treasury market dysfunction precedes corporate credit stress, not the other way around. The 10-year yield at 5.28% — up 29% in a year — while the government runs a $1.9 trillion deficit isn't a policy rate problem, it's a buyer strike. When sovereign debt reprices before private credit does, you're not watching monetary transmission, you're watching the foundation crack.