Three weekend thoughts on debt, buybacks, and real yields:
1. Treasury buybacks while running massive deficits is like taking Ozempic and downing 4,000 calories daily. The optics matter, but the math doesn't change. You can't shrink the balance sheet and expand it simultaneously without consequences.
2. Everyone keeps asking if NOW is the moment to panic about US debt. The answer remains the same: probably not yet, but the margin for error keeps shrinking. Markets can stay calm far longer than fundamentals suggest they should — until they can't. Watch the real funding costs, not the headlines.
3. 30-year TIPS at 3% real yield? That's a legitimate question worth modeling. Historically attractive, but depends entirely on your inflation assumptions and whether you believe the Fed can defend 2% over three decades. Not a slam dunk, but worth serious consideration if you're building long-term real return exposure.
Debt dynamics don't resolve quickly. They resolve slowly, then all at once.
1. Treasury buybacks while running massive deficits is like taking Ozempic and downing 4,000 calories daily. The optics matter, but the math doesn't change. You can't shrink the balance sheet and expand it simultaneously without consequences.
2. Everyone keeps asking if NOW is the moment to panic about US debt. The answer remains the same: probably not yet, but the margin for error keeps shrinking. Markets can stay calm far longer than fundamentals suggest they should — until they can't. Watch the real funding costs, not the headlines.
3. 30-year TIPS at 3% real yield? That's a legitimate question worth modeling. Historically attractive, but depends entirely on your inflation assumptions and whether you believe the Fed can defend 2% over three decades. Not a slam dunk, but worth serious consideration if you're building long-term real return exposure.
Debt dynamics don't resolve quickly. They resolve slowly, then all at once.