Vandell
Co-Founder of Black Swan Capitalist, Crypto/Gold Macro
The US government is running out of willing lenders, so long-dated Treasuries are being absorbed only at higher yields. Foreign private demand has dropped sharply while deficits remain elevated, and the market is taking the debt only at higher yields and through heavier short-term issuance. Traditional sources of capital are drying up, and at some point the bill always comes due. x.comÂ
The bid for US Treasuries is thinning beyond Japan, leaving the US needing new buyers to fund its borrowing. Net purchases by the most US-aligned countries are down more than 60% to their lowest since 2021; South Korea sold a record $23.8 billion, the most since 1977. x.comÂ
Long-dated US Treasuries face pressure because the market will buy US debt only at 5%-plus yields, with no short-term fix in sight. The 10-year yield keeps climbing parabolically as Washington issues enormous debt to fund deficits, investors demand more compensation for inflation and duration risk, the Fed is now raising rates, and Treasuries must compete harder for global capital. The government seems reluctant to act, while rising oil prices add to inflation pressure. x.comÂ
Long-dated Treasuries are the safe-haven trade again as money rotates into yield. With the 30-year paying over 5%, holding non-yielding assets is harder to justify; after the Fed held, yields fell across the curve and TLT rose 1%. x.comÂ
Long-dated government bond yields are surging worldwide at once, a sign something is wrong. UK 30-year yields hit 5.88%, the highest since 1998, the US 30-year topped 5%, Japan's 10-year reached 2.95%, and German and French long yields hit 2011 and 2008 highs. The roots are dangerous government debt levels, European and UK central bank balance-sheet shrinkage, and tech giants issuing 20-40-year bonds that draw pension and insurer demand away from government debt. x.comÂ
Long-term Treasury yields keep climbing because investors increasingly doubt America enough to lend to it for 30 years, and nobody can force them to lend cheap. US debt is $40 trillion, interest costs over $1 trillion a year, more than the military, and the deficit is 6% of GDP during a boom. Treasury Secretary Scott Bessent's $4 billion buybacks are fake demand that fixes none of the overspending, a point Stanley Druckenmiller made in his op-ed "Let the Bond Market Speak." x.com x.com x.com … Show more
Falling Treasury yields reinforce the growth-scare thesis and mark a bullish turn for long-dated Treasuries. The 10-year yield is breaking below 5% as TLT rallies. x.comÂ
Treasury buybacks are too small to offset selling pressure on long-dated US Treasuries. Today's buyback of up to $6 billion of 20- to 30-year debt barely moves the needle, and recent buybacks have failed to push yields sustainably lower. The bond-vigilante read is that investors are selling into Treasury's buying to test Secretary Scott Bessent's ability to control the long end. x.comÂ
US Treasuries face rising yields because the US is running out of willing buyers for its debt. With about $40 trillion of debt and large deficits, foreign governments no longer want to finance America after errant trade policy and poor diplomacy, and capital has better places to go than government bonds. Bondholders have lost a ton in the past year. Higher rates will either curb fiscal bad behavior or create a crisis, since a 5% Treasury cannot last long without a debt spiral. x.com x.comÂ
Long-dated Treasuries look oversold because Treasury Secretary Bessent is likely to intervene soon. Long-end yields reflect term premium from a fiscal problem, not inflation fear, and only the issuer can fix it by shifting supply to bills, sizing up long-dated buybacks and signaling it. Treasury already doubled long-dated buybacks in August. With a trillion-dollar interest bill, policymakers have a pain threshold; the 1942-1951 yield cap is the precedent. @UrbanKaoboy sees a capitulation bottom. … Show more
Long-dated Treasury yields face more upward pressure than in the 1990s, a common comparison. Then, yields were high but falling from the early-1980s Volcker peak, and the US was the sole superpower. Now yields are turning up from their 2020 low, while the Iran war has driven oil-led inflation and exposed weaker US military dominance, denting confidence in Treasuries. Foreigners bought over $940 billion of US stocks in a year while selling Treasuries. Pressure persists until macro tensions ease. … Show more
