Rose Celine Investments
Equity Investor
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.comÂ
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.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
US large-cap equities are the best way to keep up with inflation in the things that matter, so 5% bond yields over 10 or 30 years fall short. A Subway sandwich that cost about $5 twelve years ago now runs about $20 after tax, roughly 12% a year. 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 now pay enough to beat gambling on leverage: a 30-year Treasury at 5.60% turns $5 million into $280,000 a year, about $23,333 a month, for 30 years without touching a stock or watching a chart. x.comÂ
Strong corporate profit margins may make the S&P 500 better value than traditional P/E ratios suggest, despite elevated stock prices. Per Bloomberg, its P/E-to-profitability ratio is at its lowest in nearly 14 years, last seen around 2012. Wall Street might be overlooking something important. x.comÂ
Long-dated Treasuries carry duration risk that isn't worth taking given a structural 6% U.S. deficit and bipartisan acceptance of inflation to support asset prices. With 4.5% available at the short end, there is little reason to own the long end. Even Lacy Hunt, long confident in deflation, is throwing in the towel on long bonds over fiscal largesse. Six years after Covid nothing has changed, so this is not about a local tradable bottom. x.com x.comÂ
The S&P 500's elevated P/E masks concentration in just a few stocks, making index exposure less appealing than selective stock picking for risk and reward. Its P/E is well above the ten-year median; digging into individual constituents looks more sensible than buying all 500. x.comÂ
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