Why Bond Yields Matter More Than You Think š²
Most traders ignore the bond market. Big mistake! If you want to understand where the economy is headed ā or whatās really driving risk assets like crypto ā you need to watch yields š
šø Bond yields and prices move in opposite directions. When investors buy bonds, prices go up and yields fall.
When they sell bonds, prices drop and yields rise. A spike in yield means investors are dumping government debt ā usually because they want higher returns or see rising risks.
š Recently, the 10-year US Treasury yield jumped sharply, from 3.88% to over 4.5% in just a few days. That kind of move in bonds is rare and serious.
It suggests that the market is losing confidence in the stability of US debt or expecting inflation to stay high š±
If large bondholders like China are selling, it's likely to be a response to rising trade tensions and Trump's tariffs.
Higher yields mean higher borrowing costs for the US government, tighter credit, and more pressure on the Fed. And when the bond market breaks ā everything else does too.
This surge in yields also breaks Trumpās plan to refinance US debt at lower rates š«¤