“Neutral rate” creeping higher? Oh dearie! Bloodbath at the long end.
Further pressuring long-term Treasury yields, amid fears of bad inflation “surprises.” Share buybacks a lot more expensive, but no problem either.
Record QT and big Rate Hikes no problem: Corporate Bond Market Distress Index drops to lowest level since before the Fed started tightening.
The new era of “higher for much longer.” The 40-year bond & mortgage bull market died in late 2020.
“Higher for longer be damned”: consumers and businesses.
One reason why the drunken sailors are in no mood to slow down. Lots of them make a lot more money on T-bills, CDs, money-market funds. Others pay more.
Not much of a hangover yet. Going to see more of these frying-pan charts
Keeping an eye on them because some day enough of them will get in trouble to move the needle. But not yet.
Tightening is a slow process, and there is still a flood of excess liquidity chasing after yield.