The flashing-red bond market is the thread that may unravel the entire world economy
The bond market is signaling significant stress in the global economy, with U.S. Treasury yields reaching levels not seen since before the 2008 financial crisis. This situation reflects a shift in the U.S. economy's behavior, resembling that of a volatile emerging market. Political maneuvers may no longer suffice to alleviate the pressure, as structural issues drive the bond market's repricing.
- ▪The yield on the 30-year U.S. Treasury recently hit its highest level since before the 2008 financial crisis.
- ▪The 10-year yield, which influences global borrowing costs, climbed to over 4.65 percent.
- ▪Political rhetoric from President Trump is unlikely to address the underlying structural issues affecting the bond market.
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Open this photo in gallery:A trader works on the floor of the New York Stock Exchange in October, 2021. If the bond market is the engine temperature gauge on the global economy’s dashboard, it’s flashing red, writes Christopher Collins.Richard Drew/The Associated PressShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountChristopher Collins is a fellow with the Polycrisis Program at the Cascade Institute at Royal Roads UniversityPreviously in these pages, I argued that the global financial system was developing the “architecture of a polycrisis” – interconnected systemic risks were emerging across sovereign debt, leveraged finance, private credit, equity concentration in technology and geopolitics.
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