Read over my prior posts, specifically on the bond market.
Fed needed 3 trillion and change to support the 10's and 30's last year and buys them at 100-120 billion a clip per month. But nonetheless bond prices are crashing and yields are spiking.
Bond market is not buying bonds because excessive issuance and skyrocketing inflation which is now in excess of the yields on the 10 and soon to be the 30.
Markets are reacting to skyrocketing yields as that increases the discount rate and hurts stock valuations as well as increases corporate borrowing costs. It also cuts mortgage and auto loans as per increased prices.
This is only phase one though. Intervention by month's end will push yields down temporarily but set us up for a bigger end of year crash.
Read over my prior posts, specifically on the bond market.
Fed needed 3 trillion and change to support the 10's and 30's last year and buys them at 100-120 billion a clip per month. But nonetheless bond prices are crashing and yields are spiking.
Bond market is not buying bonds because excessive issuance and skyrocketing inflation which is now in excess of the yields on the 10 and soon to be the 30.
Markets are reacting to skyrocketing yields as that increases the discount rate and hurts stock valuations as well as increases corporate borrowing costs. It also cuts mortgage and auto loans as per increased prices.
This is only phase one though. Intervention by month's end will push yields down temporarily but set us up for a bigger end of year crash.