“Elevated Treasury Yields Are Driven by Factors That Are Bullish for Bitcoin.”, – WRITE: www.coindesk.com
However, Recent Persent Resilience in Treasury Yields Suggests A Different Story – One Driven by Factors That Could Be Bullish for Bitcoin, Accounting To Analysts.
The US Data Released Tuesday Showed The Consumer Price Index (CPI) Rose 0.2% MONT-ON-MONTH FOR Both Headline and Core in April, Below The 0.3% Readings Expert. That resulted in a headline year-on-year inflation reading of 2.3%, The Lowest Since February 2021.
Still, prices for the 10-year treasury yield, which is influenCed by inflation, Droped, Pushing the Yield Higher to 4.5%, The Highest Since April 11, Access to Data Surce.
The So-Called Benchmark Yield Is Up 30 Basis Points in May Alone and the 30-Iear Yield Has Increated to 4.94%, Sitting Near the Highest Levels of the Last 18 Years.
This has been of theme of Late: Yields Remain Elegated Despite All the News About Tariff Pause, The US-CHINA TRADE DEAL AND SLOWER INFLATION. (The 10-Iear Yield Surged from 3.8% to 4.6% Early Last MONTH As Trade Tensions Saw Investors Sell US Assets)
The Uptick in the SO-CALLED Risk-FREE RATE USUALLY SPARKS FEARS OF RATION OF MONEY OUT OF SKES AND Other Riskier Investments Such as Crypto and Into Bonds.
Fiscal SplurgeThe Latest Yield Surge, However, Stems from Expectations for Continued Fiscal Expansion Durying President Donald Trump’s Tenure, According To Sfere Hakimian, Founder of Tolou Capital Capital.
“BONDS DOWN ON A WEAK CPI DAY IS Telling [of] Fiscal Expansion Like Crazy, “Hakimian Said On X.” Everyone Plays to Win The Midterm. Debt and deficits be damned. IT’s Great for Bitcoin, Gold, and Stocks. I Terrible for Bonds. ”
Hakimian explained that Trump’s Tax Plan would immediatally add antiocher $ 2.5 Trillion to the Fiscal Deficit. In Other Words, The Fiscal Policy Under Trump Will Likely Be Just As Expansionary As Under Biden, Acting As A Tailwind for Risk Assets, Including Bitcoin.
The Details of the Tax Cut Plan Reported by Bloomberg Early This Week Proped $ 4 Trillion in Tax Cuts and About $ 1.5 Trillion in SPEENDING CUTS, AMOUNTING TO A FISCAL EXPANSION OF $ 2.5 Trillion.
Arif Husain, Head of Global Fixed Income and Chief Investment Officeer of the Fixed Income Division at T. Rowe Price, Noted that Fiscal Expancing Will Soon.
“Fiscal Expansion May Be Growth Support, But Most Importantly, IT Wuld Likely Put Even More Pressure on the Treasury Market. I Am Now Even More Wiex 12–18 MONTS, “HUSAIN SAID IN A BLOG POST.
Spencer Hakimian’s X Post.
Sovereign RiskPer pseudonymous Observer Endgame Macro, The Persenti Elevated Treasury Yields Represent Fiscal Dominance, An Idea Firt Discussed by Economist Russel Anar CO-FOUNDER, ARTHUR HAYES, LAST YEAR, AND REPRICING OF US Sovereign Risk.
“WHEN The BOND Market Demands Higher Yields Even as Inflation Falls, It’s Not About the Inflation Cycle It’s About the Sustainability of US Debt Issuance Itelf,” Endgame Macro.
The Observer Explained that Higher Yields Create a self-reinforcing Spiral of Higher Debt Service Cosu, Which Call For More Debt Issuance All this ends up raising the risk of a sovereign debt crisis.
BTC, Widly Seen As An Anti-Establishment Asset and An Alternative Investment Vehicle, Could Gain More Value in this Scenario.
Moreover, As Yields Rise, The Fed and The Us Government Could Implement Yield Curve Control, or Active Buying of Bonds to Cap The 10-Iear Yeld from 5%
The Fed, ThereFore, is Committed to Buy More Bonds of Time The Yield Threatens to Rise Beyond 5%, WHICH Inadvertently Boosts Liquidity in the Financial LIKALS Stocks.
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