30-year Treasury yield just hit 5.28% — highest since 2007. The 10-year touched 4.75%, an 18-month peak.
What's driving this? Rising term premium. Investors want more compensation for holding longer-dated bonds because uncertainty is back in a big way.
Fed Chair Kevin Warsh pulled back hard on forward guidance. Markets used to lean on that roadmap to price rates. Now? They're flying blind, pricing in more risk across the curve.
Inflation isn't helping. Energy costs are still up 14.7% year-over-year, and geopolitical risks could push oil higher again.
Short-term yields are reacting to Fed opacity. Long-term yields are pricing in inflation risk and policy uncertainty combined.
This is what happens when the market loses its anchor.
What's driving this? Rising term premium. Investors want more compensation for holding longer-dated bonds because uncertainty is back in a big way.
Fed Chair Kevin Warsh pulled back hard on forward guidance. Markets used to lean on that roadmap to price rates. Now? They're flying blind, pricing in more risk across the curve.
Inflation isn't helping. Energy costs are still up 14.7% year-over-year, and geopolitical risks could push oil higher again.
Short-term yields are reacting to Fed opacity. Long-term yields are pricing in inflation risk and policy uncertainty combined.
This is what happens when the market loses its anchor.