Philadelphia – February 11 … more
Everyone has an answer to why Treasury yields have recently jumped. However, no one knows why. Basically, they don’t know because they just because they believe they have an answer to the moves of most income flows in the world. Read below.
Let’s start with the obvious: All known information is already embedded in market prices. Thus, when markets move in a seemingly sudden way, this is a signal of an unknown and not known person who has been revealed.
This means that Moody’s downgrade was not reasonably. Not only past downgrades do not predict exactly anything about the future direction of the finance ministry’s yields, it is very useful to point out that evaluation organizations simply react to what is already known. And what is well known is already prices.
That is why the level of national debt, $ 36 trillion and counting, would not be a Treasury engine performs in any direction. Think about it. Especially with debt at $ 36 trillion and much more than that according to the crimes led by the crisis that highlight future obligations that are not funded, why will $ 1 trillion more, less or between nothing? Sorry, but something that has commented so usually by politicians, economists and experts could not be a sudden source of new information. More realistically, the overall federal debt is the most prices in the world.
The trump tax cuts? Oh please. Try to be serious. The same tax cuts commented on by the same politicians, economists and experts day by day for months would hardly move the treasures based on the passage of the house. Tax cuts were known. An important known. Everyone knew that there would be something and something was not contrary to something that had been found in the news from Trump’s re -election in November.
Okay, but the finance ministry’s yields are still in relation to where it was a few weeks ago, so it should be one of the above that pushed them, right? Not necessarily. Since Friday, the yield on the 10 -year public note was about 4,5090 and two weeks ago was about 4.38. This should be Moody’s, national debt (!), Trump tax cuts or the so -called “bond market vigilantes” that impose discipline on the markets! Stop, please stop!
Was there ever a more ridiculous idea than “buying bonds”? The latter implies that occasionally a few or many desperados enter the Treasury markets, selling everything to the look of the look of discipline or anything else in Washington. It’s all so stupid. Vigilante narrative only imagines markets inhabited by sellers only, except that a seller requires a buyer to deal with himself or – the pessimism of a computer for the quality of future government income flows. But this is a divergence.
What about jumping on yields from 4.38 on May 11 to 4,5090 on May 23rd; So what about this? On January 12, 2025, the 10 -year -old was 4,7740. Yes, the 10 -year -old was even cheaper in mid -January before Moody’s, before the Trump’s tax cuts went on and before national debt crossed the 36 trillion dollars.
Nevertheless, an endless series of experts has seen it appropriate to explain the recent leap to Treasury yields. The treasures the most ownership of the world in the world and once again most of the information about information in the world. Oh, the mania! Oh, the empty, information comment. If they tell you why the finance ministry’s yields are up, they certainly don’t know why.
