Roger
Business Owner, Former Assistant Research Professor
Long-dated Treasuries face more inflation as freight and cloud providers pass higher costs to customers. JB Hunt plans major freight price increases as profits fall; Discovery+ is raising prices 20%. Microsoft plans Azure increases of up to 17% in Europe as semiconductor costs soar, with US increases likely to exceed 25%. Against 6.3% wholesale inflation, 8% inflation is incoming. x.com x.com x.com x.com x.com
Inflation has broken long-dated US Treasuries' safe-haven role. Long-term Treasuries have returned -4.1% annually in the 2020s to date, versus +4.9% in the 1930s. Long bonds look unlikely to do well for at least the rest of this decade. x.com x.com x.com x.com
Economic projections for falling inflation and rising unemployment leave December as the only window for another Fed hike, exposing long-dated Treasuries to more selling as yields rebound. Treasury buying has cooled yields ahead of the midterms, but yields should rise again with stocks and crypto through year-end. The subsequent liquidity shift should bring bearish volatility at first; then TLT should break above 81-82 as the Fed turns to cuts of at least 50 basis points by March 2027. x.com
Long-dated US Treasuries benefit from falling long-end yields as the Fed's inflation response becomes a policy error. The Fed looks likely to hike again to defend its credibility despite a supply shock; 5% rates are unsustainable, and current price action points to financial damage followed by a hard pivot. A one-year rate freeze could instead let long yields rise by giving the economy a breather and making later hikes more likely. x.com x.com x.com x.com
Long-dated Treasury yields are rising on inflation and fiscal budgets. The 30-year yield is at its highest since before the 2007 financial crisis, and within weeks the headlines could read highest since 2004. x.com
US stocks benefit when rates rise with growth because earnings outpace the drag from higher discount rates. Such periods have historically been very bullish, unlike inflation-led rate rises amid slowing growth. Since fall 2025 the 10-year yield rose from 4.1% to 5.1% while nominal GDP growth accelerated to 6.6%, faster than rates. Being long offers better risk/reward; high oil prices due to the war are the remaining inflation pressure, and an end to the war would improve the setup further. x.com
Potential spending cuts and AI-related deflation make long-dated US Treasuries an asymmetric opportunity. A Democratic sweep could cut spending; an AI-trade blowup could cause deflation, while the AI trade hurts employment. Ending the Iran war could reduce spending and oil prices. Further crude gains could damage the economy hard and quickly enough to outweigh the inflation threat. x.com x.com
Treasuries are losing their risk-free appeal as inflation runs hot and US government credibility erodes. If the 10-year projects inflation to surge, bonds that barely beat it make little sense, and Fed hikes won't slow a hot economy or fix an energy supply shock with oil at $100. Higher borrowing costs make the growing debt harder to finance, leading to money printing and more inflation. Big tech is more creditworthy than ever; even for fixed income, Alphabet's corporate debt is preferable. … Show more
Long-dated Treasuries are in a bear market as several forces push long yields higher. Oil and diesel prices tied to Russia-Ukraine, a Fed more determined since Jackson Hole to return inflation to 2% by holding rates high into a supply shock, and heavy corporate issuance for the AI buildout all weigh on bonds. Long yields are also returning toward their long-term average of about 5%. x.com
Long-dated Treasuries could rally 20-30% over the next few years if deflation outpaces growth for a period. That would pull investors into bonds to lock in higher yields, pushing yields down, since government money printing isn't keeping up with emerging deflation. US government finances should also strengthen as growth outpaces debt, making bonds more attractive. It is a small bet that should work for a period of time. x.com x.com x.com
Long-dated Treasury yields keep rising because of US debt: Hormuz traffic has recovered and PCE inflation is cooling, yet yields won't come down. The government refinances $9 trillion a year plus over $2 trillion of new borrowing, about $30 trillion of issuance through 2030. With faster growth and deficit cuts seen as unlikely, investors see inflating the debt away as inevitable and refuse lower yields, pushing up the term premium itself, the textbook definition of a debt spiral. x.com