The Bond Market Is Breaking

Added: 2026-05-26

[00:00:00]As of right now, UK's yield hit the highest level since 1998. Japan's yield reached the highest level ever in history. The US 30-year is at a point that we haven't seen since 2007. Rate hikes are back on the table, and yet the bond market is breaking. But, just from what I could tell, so far this is not the same as 2007, where a corner of the mortgage market just brought down the entire economy. Instead, this one is a lot slower, a lot more boring, and in some ways actually a lot more dangerous because it's affecting pretty much everything at the same time. For instance, like I mentioned earlier, higher bond yields means that the government pays more to borrow money, which just adds to the national debt that we already can't afford to begin with. And top of that, mortgages stay higher for longer, companies refinance at higher interest rates, stocks have to compete with a guaranteed 5% return in Treasuries, and consumers then have less money left over after paying for credit cards, auto loans, insurance, and everything else that's going up in price.