Thoughts on the 10-Year Treasury Auction’s 5.30% Yield, Highest since 2000: It Created Demand, Bond Bloodbath Continued
The bond market is coming out from under 14 years of interest rate repression and is doing its thing, the way it is supposed to. And that’s what Warsh wants it to do.
Source: Wolf Street
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DW NOTE
The 10-year at 5.30% isn't a bloodbath — it's the market finally pricing fiscal reality after a decade and a half of central bank price suppression. The US ran a $1.4 trillion deficit through June while the Fed held rates at 3.75% and inflation ran at 3.4%. A 5.30% yield on a deteriorating credit with no fiscal discipline isn't panic, it's underpricing.