Bond market is repricing risk. 10Y Treasury at 4.7% isn't cutting it anymore — investors are waking up to the fact that structural deficits aren't going away. No real plan to address them, and odds are they expand over the next decade.
Deficits = inflation. Simple as that. We're living beyond our means, funding it with borrowed money, and the payback comes in cheaper dollars. That's the inflation tax.
This isn't a temporary spike. It's a repricing of sovereign risk in real time. If you're long duration without inflation protection, you're getting paid to lose purchasing power. Not a trade I'd take.
Deficits = inflation. Simple as that. We're living beyond our means, funding it with borrowed money, and the payback comes in cheaper dollars. That's the inflation tax.
This isn't a temporary spike. It's a repricing of sovereign risk in real time. If you're long duration without inflation protection, you're getting paid to lose purchasing power. Not a trade I'd take.