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- Hacker News
- A garbage article. Yields went down after the housing bubble in 2007 because the central bank interest rates were lowered, not because the investors decided to flock to a safe asset.
Yields are high because the inflation is also running high and it doesn't like it will come down anytime soon so the central bank interest rates will also be kept at a higher level.
Long term bonds can be replaced with short term bonds which are constantly rolled over. The bond yields are pricing in the future interest rates, nothing more.
by mono442 - Treasury interest rates just decoupled from bond yields. That's the news.
They were only coupled in the first place because treasuries were seen as the safest of havens. That means everything else had to pay more interest than them. So is that no longer the case?
The last Fed meeting saw high inflation and decided not to adjust interest rates, with the stated reasoning that the market will fix it by itself. This could be how the market fixes it by itself.
by inigyou - selling stocks and buying bonds in a recession where interest rates go down (so bonds are priced higher) and expected revenue for most sectors go down is a no brainer.
Agree, but there's also the expectation of future debt. A bigger debt means a bigger issuance of bonds, so the new supply-demand equilibrium moves the rates higher as it's the only way to convince investors to allocate more to bonds.
Technically, yes, but if you create demand for long term bonds and create supply for short term ones, you'll flatten the yield curve and pay long term yields for short term durations.
Bessent tried that, didn't work to calm down the bond yields. Unless you meant the USA is not interested in longer term bonds, which is obviously untrue, because Bessent is intervening.> Long term bonds can be replaced with short term bonds which are constantly rolled over
For investors, the price is the risk they want to get compensation for. The investors are increasingly worried about the credibility of the USA. Sure, the USA can print dollars, but Banana Economics Class teaches you that trying to inflate oneself out of debt with reckless printing will have some adversarial effects. You can't fool smart money that easily.> The bond yields are pricing in the future interest ratesby exceptione- Check out the federal funds rate over the last 5 years: https://fred.stlouisfed.org/series/fedfunds
Vs the 30 year bond yield: https://fred.stlouisfed.org/series/DGS30
That’s the news. The fed is desperately trying to get interest rates lower, but the free market isn’t buying it. The treasury is also pulling out some very desperate moves to control this, like selling euro for JPY without even telling the EU, we will see how it works out.
- TLDR: yes.
- Trump will go down in history as causing the most damage to the US, economically, politically, in terms of foreign standing, and possibly even militarily, of any president. Nixon is starting to look like a saint.
- The bottom line is that the country cannot spend more than it makes in tax income indefinitely and anyone who says otherwise is delusional. Unfortunately, I think the reckoning for all this debt will come sooner than many people expect.by nsvd2
- I think countries can, but there is a limit to how much debt you can have. It’s fine and even likely better for countries to have some deficit, but not $40T while also starting a war with Iran and imposing random tariffs that destabilize the world economy (+ attacking your allies, and all the other things Trump has done over the past decade, including adding an insane amount to the deficit)by dgellow
- The reckoning will be put on Democrats. It's quite hard to do this while the Republicans hold all the power, but as soon as it flips the media will care again.by pjc50
- That’s not true, because it would have to mean that money is created by the private sector (or just magically springs into existence somewhere) and that taxing it is the only way for the Government to get it.
Money is a created thing, a creature of the state. We maintain certain fictions about it (like “tax to spend”, allowing the market to set bond yields most of the time and keeping track of the outstanding bonds as “government debt”) because people are scared that Governments wouldn’t be controlled enough to manage money creation if they overtly used the powers they have to issue currency… But effectively they still kind of do it…
And while it’s not perfect it’s actually far more stable than attempts at fixed exchange rates and pegging currency to commodities like gold (which always fails eventually, because it doesn’t stand to reason that the amount of gold or any other commodity in a country would correspond to how much money the economy needs. You can set the exchange rate but it always drifts, so those periods tended to swing between big deflation and then inflation, with panics, recessions, and financial crises every few years)
by stephen_g - Sort of yes and no. I don’t think indefinite spending was ever on the cards.
But if other countries tried to maintain the levels of US deficit / debt, they were given far less lenience from investors, in pressure / yields. This was because US was seen as, on the whole, fiscally responsible, very productive, and safer from shocks - to the point that when the US mortgage crisis exploded, the safe haven for assets was… the US.
As these assumptions are challenged, the US is waking up to what the European old economies experienced following 2008. Increasingly yields, increasing costs of borrowing etc.
If you’re reliably printing good GDP growth, higher level of debt may be good as it gives you more leverage, and drives more growth in turn. But leverage is a multiplier and it isn’t free, so if the engine sputters, you might find yourself falling out of the car at a greater speed…
by rich_sasha - You can deficit spend indefinitely as long as your deficit percentage is below your economic growth percentage. That keeps the total debt as percentage of the economy stable and the amount of tax you need to service the debt a stable percentage of your total tax.
If you do that it can be a good idea. It's a way to accelerate investment. It can also be a good idea to modulate your deficit in a cycle counter to the economy so that it acts as a stabilizer.
The US has been failing on all these. The deficits are too large and are high both in good and bad times. Eventually that breaks things.
by pedrocr - remember the utter destruction of the economy by the Bush administration?
everyone was so relieved when he was finally flown away for the last time by Marine One, he couldn't do any more damage
well this is round two, just keep voting for this kinda of garbage corruption
pray for a full impeachment because otherwise two more years is going to leave a burning dumpster fire of a country (but Vance maybe even worse)
his drapes! his golden statues! his ballroom! his ARC! his helipad! his flagpoles!
his image on passports, gold coins, $250 bill, park passes! 100 foot banners of his image on federal buildings!
renaming warships and airports after him while still in office
ONE BILLION DOLLARS in taxpayer funded renovations for all his nonsense in DC
ANOTHER BILLION DOLLARS stolen from nuclear missile maintenance for his QatarForceOne
$6 Million per day in pardons and other grift
$2 Million every weekend for his golf outings
go on, tell me any other administration from any party was ever this insanely corrupt
now imagine what else he is doing to the country, selling federal land, got the CIA mucking around in Greenland and who knows where else
and he's definitely doing Cuba after November
by ck2 - This is round three. Half the electorate saw round two and said, “more of that, please.” That’s why we’re fucked, not because of the particular idiot they chose.by wat10000
- It's very easy to look up what the govt spends money on. All of these things are rounding errors that make good rage bait. The biggest, and some of the fastest growing, outlays are medicare and social security - money transfers from everyone else to the richest demographic in human history. In case of medicare, also mostly unproductive money transfers. I think these are deeply immoral, but I guess helping grandma doesn't make for good rage bait so it's easy for both parties to get distracted by tiny line items that, fiscally, do not matter - be it DEI, ballrooms or whatever.by sershe
- They’re just lining up the Xth once in a lifetime crisis for millennials…by Havoc
- The vaguepost by Bessent in today’s Financial Times looked pretty weak: https://www.ft.com/content/cb865200-1a06-40be-86a3-10ee2bb05...by cjs_ac
- He sounds like an extortionist. I particularly liked the reference to "America's tolerance."
https://archive.ph/2026.08.24-074023/https://www.ft.com/cont...
by SanjayMehta - All that has to happen to fix this is taxes. The ultra rich tax's need to be raised to a level the US had before Reagan. Instead the people running the US want the poor and middle-class to pay for everything and enrich the rich even more.
Until that is fixed, the US will end up as a banana republic with lots of nukes.
> rates on mortgage loans and other long-term lending across the economy – are walloping his popularity, helping freeze the housing market
Looking like 2007 again ? The GOP loves flirting with creating a massive depression.
by jmclnx - > All that has to happen to fix this is taxes. The ultra rich tax's need to be raised to a level the US had before Reagan.
What was inflation like before Regan?
by zdragnar - Once again, I'm begging you, with tears in my eyes to learn the difference between statutory and effective tax rates. Do I disagree that there were headline rates of 70%? No. Did anyone pay those rates on any meaningful amount of their income? Also no.by coredog64
- 2007 was very different. There was an entire industry propped up by artificially manufactured speculative demand. This was a real industry that produced loads of jobs,drove downstream industries and had significant involvement from a huge portion of the population.by hattmall
- Almost everything this administration does is inflationary. You cannot have tariffs, oil crisis, tax cuts, high debt spending without long-term investors getting worried that they won't meaningfully get their money back in 10 or 20 years from now.by pu_pe
- How much of it is "the current administration" and how much is simply the continuation of a much longer trend? The US has been at war with this or that country in the Middle East for as long as I'm alive and I'm almost 40. Same with tax cuts, high spending and so on. It's easy to blame everything on Trump (or Reagan), but it seems to be a much broader issue with the whole systemby usrnm
- Trump is surrounded by people whom appear subservient under the sort of shallow gaze that Trump can muster if he tries hard enough, but in reality Trump is of course a tool, yes a pretty clumsy one who keeps trying to remind you who is the president here, but he is just following carrots dangled by very smart people with the means to keep Trump feeling the endorphins that Trump believes he is entitled to for winning in 2024.
And I gotta be honest, the carrot danglers don't seem to have a prosperous and thriving democracy in mind as one of their goals lol
by cowboylowrez
Yes, that was both funny and tragic. But it also demonstrates why smart people made him president: he is beyond perfect for redirecting attention. By burning the institutions down and by severing international relations, a certain class of people can finally disable the corrective and limiting mechanisms that keep them in check. Even if that means the whole country needs to be burned down. Zero sum in business, zero sum in church, zero sum in state governance.> And he hinted at a novel approach to monetary policy, suggesting that “the ultimate intervention is our military”.by exceptione- Smart people helped him be the candidate.
People who didn't mind that he is a racist, xenophobic, anti-semitic, bigoted philandering malignant narcissist grifter made him president.
Intelligent lawyers degraded themselves to make it happen again.
I do think trying to backdate the idea that intelligent people are behind Trump's rise because supposedly intelligent people are now on the Trump train for their own expedient reasons ignores that the beginning of the Trump movement was grounded in his explicitly bigoted and racist proclamations.
It's not like he came down the escalator with any pitch to intelligent people. Appeals to hatred, bigotry, conspiracy theories and racism were a key plank of how he drove his candidacy from the very beginning. Enough Americans chose this revolting human being as their avatar to make it happen. Twice.
Nobody was conned by intelligent people: they went along with the racist carnival huckster.
by dofm - The military threats include burning down other countries.
Now, people accept the "no angel" defense for Iran and Venezuela. Just like a cop is allowed to execute someone in the street if they have a criminal record. But now we have to work out how serious the threats against Western countries are, or whether they're just routine Trump bullshit for social media. Is there a real prospect of the use of force against Canada, or Canadian nationals in the US? Is there a limit to the trade sanctions? If the US can sanction individual ICC members, can't they exert pressure on Carney by debanking him too?
by pjc50 - … and yet America voted for him a second time. I just don’t get whyby sghiassy