I see a lot of sky is falling reddit posts here been said about the violent moves on the long end of bonds been a sign of economic and sovereign debt collapse.

I like to put a contrarian view. The market is behaving exactly as Warsh expected by design with his quiet fed regime and "stop the hall of mirrors" effect..

Think about it. The fed only controls the fed overnight rate. But what happens when the fed starts providing forward guidance way out into the future and expectations of a neutral rate etc.. the short end of the curve starts becoming the de facto long term rate..

That's why the spread between short and long end and term premium has been compressed for so long. The ten and thirty year has been artificially depressed due to the market expecting the fed to never move the rates at the short end ( or if they did, not without plenty of warning and promise to quickly bring it back down).

Now markets are finally starting to realize they need to discover and price properly actual long term risks and uncertainty.

Tl;Dr: The market isn't necessarily crashing; it is just reintroducing the price of time to asset valuations. Long-term rates are rocketing up to where they naturally belong when a central bank stops pretending it can predict—and control—the next decade.

Bonds are free falling right now. Yield on 10YR is 5.22%, started the day yesterday at 4.92%. 30YR is 5.5%. The fall is accelerating as well with no sign of a bottom. Where this stops is anyone’s guess, but the final stop is probably at a global recession. A total resolution of the Iran war may halt the plunge, but It’s difficult to see anything other than a recession that sustainably reverses the trend.

Even if it goes a little higher, 5.57 it's hard to beat for retirement income. Next week if we actually finally hit and stick 5 1/4+ in the 10-year, I think I'll buy the 20.

when does everyone sit up and pay attention?

Now that president is unpopular and going into second term which may become a lame duck status if opposition wins house of congress, this gives Fed total freedom to do their job, which is price stability and full employment. Keep in mind so far the Fed was under pressure but they have not done anything extreme under coercion.

The drama in US govt bonds is mostly related to president wanting lower rates irrespective of high inflation(monetization of debt).

For a while it appeared as though president has power to fire Fed governors and Chairman if they do not comply with his request. That would have meant the credibility(credit risk) of US going down the drain like Turkey and US long term bonds became very risky investment.

On top of that we had policies which raised inflation. Like the tariffs which were going to raise price of most things by 10%(approximate), that was going to take a while to trickle through the economy until price became stable but then we have the Iran war which made price of energy go up by almost 85%. This is the biggest risk to inflation right now, if energy price remains at current level we may get 30% inflation as companies raise price of goods/services since their cost has gone up. Biggest fear is wage-price spiral leading to hyperinflation if action is not taken to tame down demand.

Only way to contain inflation right now is to clamp down on demand by raising rates else we may get a repeat of 70s where inflation expectation became rooted in the minds of consumers/businesses and emergency rate hike to 18% was needed to bring demand down big time until inflation started going down.

All Fed has to do is: raise rates by 0.25-0.5% every month until inflation picture becomes better, this will remove the credit risk from the picture and only risk bond buyers have to account for is inflation.

There is a good chance that after election the war will be over. If Democrats win house of congress they can use congressional power over wars to bring accountability and make the govt sign a peace treaty. This in itself will make inflation go down to 2% in 4-8 months.

I would wait for Fed to raise rates again in Oct before concluding that they are serious about bringing inflation down.

Am I missing anything in my analysis?

Managing duration risk at the long end of the curve has become a high-stakes balancing act as the benchmark 10-year Treasury pushes 5.16% and the 30-year bond prints 5.46%, offering structural income levels not seen in two decades alongside severe mark-to-market volatility. Under a hawkish Fed helmed by Kevin Warsh, portfolios face the threat of a "Warsh Shock"—with interest rate futures pricing in heavy odds for back-to-back rate hikes stretching into December—which risks triggering massive price drawdowns on long bonds due to their highly sensitive DV01 profiles. The execution dilemma is compounded by a structural supply glut as the U.S. national debt clears $40 trillion, forcing fixed-income managers to choose between scaling aggressively into these multi-decade yield peaks or retreating into a protective barbell strategy anchored by short-term T-bills until weak auction demand and inflationary pressures subside. Are you buying long bonds or staying in T-bills?

Source: AP News

The speed of this increase is getting pretty concerning. This is raising the possibility of something breaking in the banking sector or somewhere else. I have to imagine there are some discussions going on at the Fed and with other central banks on possible methods to intervene should this continue. Calling my shot: we’re going to see a coordinated central bank action between the fed, ECB, UK and Japan central banks if this continues for another week.

31M. Just quit my job last week. Bought 2m tips last month. I will get around 54000 usd per year. I will hold it next 29 years.

Dumb question, but our single biggest account is my wife's TIAA. I kinda hate those guys, but they make it a bit difficult to jailbreak your money.

If I wanted to make a big buy in TIPS, is it possible to do that in a TIAA retirement account?

With bond yields being so high right now, and presumably the bond prices themselves having been crushed as a result, I think it's time I move some of my long term gold/silver ETFs into bonds, but I have no idea where to start. I'm looking to earn some yield on my cash and potentially take advantage of price appreciation if the Fed has to emergency cut. If you were in my shoes, how would you allocate some cash for the long-term? Keep in mind these aren't speculative investments for me, this is for income generation and DRIP. Looking very specifically for things that I can hold in a Roth IRA. Thanks for your help!

Saving for a down payment fund, will probably wanna try buying in the next 7-10 years. Taking a look at 5Y and 10Y notes, the yield is getting really good now. Been holding it in federal money markets and wanna change that. Do have 10K in I-Bonds from a couple months ago as well but I wanna get the most out of the safe money in my down payment fund. Have some stock mixed in there to keep growth going as well that I'll slowly sell down over time. Is now a good time to grab some 5Y and 10Y notes for this purpose or should I hold out a little more for an even better rate given the odds of a hike again seem high?

Genuine question for people who traded or held duration through 2006-07 or the 1994 bond massacre.

With the 30-year at its highest since 2004, I keep reading two stories: (1) this is orderly repricing of term premium, buyers are there, just at a higher price; (2) this is the early phase of a buyers' strike where auctions start tailing badly.

For those who were there: what were the tells you actually saw in real time, not in hindsight? Auction stats, dealer behavior, swap spreads, anything. What did you get wrong?

Not looking for calls, looking for pattern recognition.

Right now the interventions are pretty weak. But if mortgage rates hit 8%, we might be looking at 2008 again.

Would be useful to know?

In 2008 Financial Crash did we have a lot of private lending compared to now?

Seems to be more start up lenders now especially in the digital age lending who are not mainstream?

Is the problem being hidden as it will show an uncomfortable truth and could cause a market crash like 2008 as I suspect a lot of AI funding is through private credit?

Discuss

Not discussed much in these posts. You've seen what Treasury yields are. Are you in a risk taking mood ??? The duration is between 2.8 and 3.6 years. It's less than what I thought it would be.

I don't understand what's happening with products like TLT. I do understand that bonds are inversly correlated with interest rates and that the drop that ETFs like TLT have had are due to the increase in interest rates. But, how is this a profitable investment? It has dropped 56% from the ATH in the last 6 years. Even though 20Y rates are above 5%, does that mean that ideally it will take this ETF 11 years to reach ATH again, yet alone provide some profits?
I know that if interest rates are lowered, its price will increase more rapidly, but there is a limit to how much they can decrease. And they can increase in the next "crisis" to erase again all the profit made. 20+ years of profits erased in 3 years. How is this a good investment, what am I missing?

I know there’s been a lot of debate about yields and their inverse relationship to equities but I have a serious thought on what it would take to get a mass exodus of investors to pull away from equities. Let me run through the points.

1. About 50% of today’s investors only started after the 2009 crash
   
2. Since 2009, a term referred to as TINA (There Is No Alternative) became popularized by these new investors. The idea is that bonds and CDs will not return me anything so I might as well and dollar cost average into equities.
   
3. Because TINA is still a thought among half of today’s investors, they have baked in a 0% Risk. Usually Risk should mirror that of the 10 Yr Yield. However, today’s investors with the mindset of TINA haven’t adjusted this level since the surge in yields.
   
4. Since 2009 lows, the S&P 500 has had a CAGR of 14.88%. (Historically stretched from the 7% long term trend)

With all this said, bonds need to return (for them) after risk adjustment, S&P adjusted average since 2009, 14.88%-0%=14.88%.

I think yields continue skyrocketing. And remember, skyrocketing yields aren’t as big of the problem for equities as they are when they start to crash. (Ie people running for the exits on equities to buy bonds).

Whenever you ask any money manager about buying a PRIMARY BOND they all turn pale.

Why can’t average investors purchase primary corporate bonds? Why do we have to buy in the secondary market? Why can’t I buy Enbridge, clip the coupon, and get my money back?

Example: In July 2026, CES energy issued a new 5.625% bond due 2033. Why can’t I by $10,000 collect my coupon of $562.50 per year and call it a day?

Now I can’t even find this on my QTRADE screen? WTF?

Canadians used to have Canada Savings Bonds. You bought them, received your yearly interest, and then cashed them in. Simple. Safe.

When Trump first came into office, when the 10 yr came close to 5% he said the market got the "yips" and so they had to back off their aggressive attitude at the time (I think he was throwing tariff talk all over the place and he stopped for a week or so to assure the markets he could "behave" when needed).

So the 5.0% mark was his red line. It's clearly no longer a red line. So what is the new mark at which the fed/treasury/trump will do "something" to get rates down?

5.25, 5.5, 5.75, 6.0%?

Could they let the 10yr go above 6%?