Via the Kobeissi Letter: “You know it’s bad when bond market is quite literally ignoring the US Treasury. 24 hours later and the 10Y Note Yield is now pushing into 4.80%, its highest since January 2025. That’s another +20 basis points since the low seen after the US Treasury’s intervention announcement 13 days ago. In a sudden turn of events, 7% mortgages are back, the 10Y Note Yield is nearing 5%, and markets are expecting a September rate hike. This marks a +85 basis point run in the 10Y Note Yield since the Iran War began. Once again, the US simply cannot afford the 10Y Note Yield at 5% for a sustained period of time. We expect further attempts at intervention immediately. But, the question becomes: will markets listen?
Mark Skidmore is Professor of Economics at Michigan State University where he holds the Morris Chair in State and Local Government Finance and Policy. His research focuses on topics in public finance, regional economics, and the economics of natural disasters. Mark created the Lighthouse Economics website and blog to share economic research and information relevant for navigating tumultuous times.
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