The US debt crisis is set to get even WORSE: The House Reconciliation Bill would increase debt by $3.3 TRILLION, or $5.2 trillion by 2034 if made permanent. That would increase debt-to-GDP ratio to 125% or 129% if made permanent.
National debt would hit up to $ 55 TRILLION. https://x.com/GlobalMktObserv/status/1924185722665230658
...looks like Japan and US long term yields are racing to outdo each other to the upside.
...why Moody's US downgrade affects Japanese bond - a downgrade on a major country with +120% Debt to GDP is an equal or bigger hit to another major country with 216% Debt to GDP
..the bond market is demanding a higher risk premium.
..the worse part for the US is that it elects to go ahead with the very action (tax largesse) that the bond market deems recalcitrant
..Bessent needs to hope that he does not face a Liz Truss moment. And a continued rising 10 year yield could embolden the bond vigilantes. US 10 yr yield has shot higher by +2.46% to 4.548pc possibly en route to 4.81pc high that was reached at the end of 2024.
BREAKING: Fed Caught Quietly Bailing Out Bond Market with $43.6B Injection. No buyers? No problem. The Fed just snapped up billions in Treasurys: $8.8B in 30-year bonds in a single day and 43.8B in total last week.
Nobody buying the Long term bonds at these prices but the FED.
Yet somehow everyone expects rate cuts, meaning even higher bond prices for the FED to 100% own the market.
Debt valuations need a massive downside re-rating, this means a rate spike to the upside are actually required.
Bye bye Real Estate, Auto's and all other financially leveraged 'assets'.
