Bond Market Faces Severe Strain Amid Rising Yields and Tariffs
The bond market is under significant pressure, leading to alarming warnings from financial analysts. Key points include:
- Jim Bianco from Bianco Research noted a historic spike in the 30-year US Treasury yield, increasing 56 basis points in three days.
- Cathie Wood of ARK Invest mentioned serious liquidity issues within the US banking system linked to this crisis.
- Daniel Yan from Kryptanium Capital warned of potential emergency Federal Reserve intervention if high-yield indices exceed 6%.
- Peter Schiff highlighted a crash in the Treasury market, with the 10-year yield hitting 4.5% and the 30-year at 5%.
- Macro analyst Alex Krueger pointed to rising long interest rates as problematic.
This turmoil centers around the basis trade, a leveraged strategy by hedge funds that may now be unwinding, causing bond prices to fall and yields to rise. This situation also coincides with declining crude oil prices, indicating broader systemic stress.
For Bitcoin and cryptocurrencies, the ongoing upheaval presents both risks and opportunities:
- Bitcoin's correlation with risk assets has increased as it fell 8% alongside a 12% drop in S&P futures.
- Speculation about possible Federal Reserve interventions could positively impact Bitcoin prices.
- Market experts suggest that a weaker dollar policy from the Trump administration may benefit Bitcoin.
As of now, Bitcoin is trading at $76,952.
