Just caught something that's been bothering me about the bond market lately. Albert Edwards from Société Générale - you know, the guy who's been consistently bearish for years - just put out a note that's worth paying attention to. He's flagging that US Treasuries are showing some pretty troubling signals, and honestly, the implications could be serious.

So here's what's happening. Bond yields have been climbing hard. The 10-year Treasury hit around 4.28% this week, up 32 basis points since the Iran situation escalated. And it's not just the 10-year - both the 2-year and 30-year have touched levels we haven't seen since the 2008 financial crisis. That's the kind of move that gets people's attention.

What Edwards is really worried about is what this means for inflation. He's arguing that inflation is creeping back toward 1970s territory, and it's not just about geopolitical shocks. The bigger issue is structural - massive government debt, fiscal dominance, political constraints. All of that is inherently inflationary. He thinks we could see year-over-year inflation eventually hit somewhere between 10% to 20%, which would rival the worst of the 1970s when it peaked around 11%, then spiked again to 13% in 1980.

The bond market is essentially pricing in this risk. As investors reassess economic impacts and factor in higher inflation expectations, demand for Treasuries is cooling. Edwards sees this as a secular bear market for bonds globally - meaning rates stay elevated for a long time, not just a temporary spike.

Now here's where it gets interesting for equities. Edwards is pretty clear that a bear market in bonds is never good for stocks. If inflation is rising and the Fed doesn't cut rates as expected - the market is currently pricing in a 64% chance rates stay unchanged through year-end - then you've got a double squeeze. Corporate borrowing costs stay high, and valuations get compressed because higher rates make future earnings less valuable.

He's even warning that the S&P 500 could lose about 25% of its value in this scenario. That's a significant drawdown, though Edwards has been making bearish calls for years while markets kept climbing, so take that with appropriate context.

The core tension Edwards identifies is real though: if geopolitical conflicts, fiscal deficits, and political dysfunction keep pushing inflation higher, both bonds and stocks could face much sharper corrections than what's currently priced in. The bond market is essentially sounding the alarm before the stock market catches up. Whether that alarm proves prescient or premature, we'll find out. But it's worth monitoring, especially as inflation expectations keep shifting.