The rout

Daily Thoughts 9 Apr 2025

From Tuomas Malinen on Geopolitics and the Economy.

Something rather worrying is happening in the U.S. bond markets. Yields have shoot up, violently. This is the 30-year Treasury Bond 5-day chart.

Source: CNBC

These are cataclysmic moves. Jim Bianco, a President of Bianco Research, noted in X this morning that:

It keeps going, the 30-year yield is now 5.00%! As chart shows, since Sunday Night, 54 hours ago, the 30-year is up 67 basis points. Cannot find a move like this in my database. The only overlay is the 30-year Gily blowing up during the Liz Truss moment" in September 2022. That was 130 bos in 5 days. We are now 67 bps 2 1/2 days.

With the “Liz Truss moment”, he refers to the collapse of British bonds (gilts) enacted by the collapse in trust among investors in the actions of the U.K.’s shortest-serving Prime Minister, Liz Truss. Essentially, because of the collapse, the Bank of England (BoE) was forced to bail out the British pension funds by re-entering the gilt markets. There’s naturally much more to the story, which I might detail a bit later. Now, it seems that the BoE has a new tool to handle such ‘glitches’. How surprising.

Jim continues by noting the worrisome simultaneous collapse of oil and bond markets. I am an expert in neither, but the combination is rather shocking, and it carries a stark message.