Mister Sailer
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Bullish
Trump is breaking the markets for a reason
The US needs to refinance $7 trillion of debt in the next 6 months.
And guess what?
It's disadvantageous for Trump to do this at current rates when the yield on 10-year bonds is too high (the chart of the decade bonds is secured).
That's why he is pressuring the stock market to drive capital into bonds.
– When the stock market falls, people rush to bonds, and their prices rise
– The higher the price of bonds, the lower their yield
– When yields fall, the Fed gets a reason to lower rates
What does this mean?
1. The US will be able to refinance debt at lower rates
2. The Fed will eventually start lowering rates
3. Once this happens – the markets will soar again, and crypto and risky assets will receive a powerful boost
As usual, inexperienced guys will get shaved, while strong holders will survive until the pump.
The US needs to refinance $7 trillion of debt in the next 6 months.
And guess what?
It's disadvantageous for Trump to do this at current rates when the yield on 10-year bonds is too high (the chart of the decade bonds is secured).
That's why he is pressuring the stock market to drive capital into bonds.
– When the stock market falls, people rush to bonds, and their prices rise
– The higher the price of bonds, the lower their yield
– When yields fall, the Fed gets a reason to lower rates
What does this mean?
1. The US will be able to refinance debt at lower rates
2. The Fed will eventually start lowering rates
3. Once this happens – the markets will soar again, and crypto and risky assets will receive a powerful boost
As usual, inexperienced guys will get shaved, while strong holders will survive until the pump.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
