#UsDebtRisk Here's something terrifying: the 10-year US Treasury yield has hit a jaw-dropping 5.2%!!!💥💥But what is even more terrifying is...
when the US government wants to borrow long-term money, the market now demands higher interest.
On one hand, inflation hasn't fully cooled, so the market doesn't expect the Fed to cut rates aggressively anytime soon. On the other hand, worries about America's long-term fiscal deficit and debt are mounting.
But this is not good news for US stocks — especially tech. If Treasuries alone can pay 5%+, capital starts asking: why should I pay top dollar for highly valued stocks whose profits only materialize far in the future?
It is worth noting that: AI tech stocks haven't shown any obvious pullback yet. Maybe the big one is still ahead?
when the US government wants to borrow long-term money, the market now demands higher interest.
On one hand, inflation hasn't fully cooled, so the market doesn't expect the Fed to cut rates aggressively anytime soon. On the other hand, worries about America's long-term fiscal deficit and debt are mounting.
But this is not good news for US stocks — especially tech. If Treasuries alone can pay 5%+, capital starts asking: why should I pay top dollar for highly valued stocks whose profits only materialize far in the future?
It is worth noting that: AI tech stocks haven't shown any obvious pullback yet. Maybe the big one is still ahead?