US 30 year bond yield reached highest level since July 2007. Nearly 19 years high.


Nobody is explaining this MATH.
When investors sell bonds prices drop and yields rise automatically. The market decides it
So why are investors selling Bond?
Inflation at 3.8%. PPI at 6%. Three hot prints in one week. Holding a bond paying 5% when inflation is running hot means your real return is shrinking every month. So investors sell bonds and move into stocks. Real estate. Commodities. Anything that keeps pace with rising prices.
Understand the twist:
Good part, When investors sell bonds they need to put that money somewhere. Some of it flows into stocks. Some into Bitcoin. Some into gold. Some into real assets.
This is called the rotation trade. Bond money leaving has been one reason stocks stayed elevated even as yields rose.
But the dangerous part nobody is saying.
Rising yields at 5% eventually compete with stocks directly. Why take risk in Nvidia at 30x earnings when you can get 5% guaranteed from the US government?
At some point that 5% yield becomes too attractive to ignore. Money stops flowing from bonds into stocks and starts flowing from stocks INTO bonds. That is when both fall together.
But here is the another part that should worry everyone.
America has $39 trillion in debt. At 5% yields the annual interest bill is approaching close to $2 trillion. Every single year. Just in interest payments.
Every 1% rise in yields costs the US government roughly $390 billion more annually.
So yields rising is not a government choice. It is a punishment.
Investors sell bonds. Yields rise. Government pays more interest. Bigger deficit. More bonds issued. Yields rise further.
The last time the 30 year yield was this high was 2007. Right before the global financial crisis.
History does not always repeat. But it rhymes loudly right now.
In short, understand this whole game of market. Mr Market balance everything
Rest. #DYOR
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