Global Treasury Yield Hits 15-Year High, Back To 2008 Despite No Change In Industrial Production (REAL 10Y Yield Now Highest Since 2009, Approaching 2%)

Confounded Interest ^ | 08/17/2023 | Anthony B. Sanders

[Kaiser8408a]

This is very strange. Global Treasury Yields just rose to a 15-year high (2008). This is primarily due to Central Bank moneta

And REAL 10-year Treasury yields also the highest since 2009.

At the same time, US industrial production is at the same level as pre-financial crisis (2007). Despite Federal Reserve monetary stimulypto (remember, The Fed’s balance sheet remains abouve $8 trillion.

This is Obama/Biden/Yellenomics. Trillions of dollars of fiscal (green) stimulus and monetary stimulus only to have industrial production be at the same level BEFORE The Great Recession and financial crisis.

[Kaiser8408a]

Bidenoomics at work!

[Vermont Lt]

And, the US will refinance half its debt in the next year. So, $15T at an additional 2% or so means the interest expense of the US will increase about $300B a year over the existing level. Cool, huh?

We won’t have to worry about mortgage rates because the tax rates are going to skyrocket—either federally or locally because money is going to get sucked out of the system at an amazing rate.

[reed13k]

Well I’m glad I never planned for social security as part of my retirement because it’s very unlikely it’ll be around in 10 years.

[Vermont Lt]

And...remember that the Fed was the largest purchaser of Mortgage Backed Securities for almost a decade. Now, with interest rates on mortgages going up—the book value of those securities will start falling. Of course, the Fed “bought high.”

The balance sheet will start to come back to earth, but I am not sure it will be a glide path.