🚨 The last three times bond volatility spiked like this, something broke.
2008: Global Financial Crisis, MOVE Index hit an all-time high near 265
2020: COVID panic, investors rushed into cash
2023: Silicon Valley Bank and several regional banks collapsed
Right now, the MOVE Index just jumped from around 80 to above 104 in two days.
It tracks volatility in US Treasury yields, and this is the sharpest move it's made in months.
Treasuries are supposed to be the calmest market in the world. When volatility spikes this fast, it means that calm is breaking down.
This one is different because it's not driven by panic.
Higher oil prices, strong growth data, and rising Fed rate hike expectations are pushing yields up together, and US10Y, US20Y, and US30Y are all sitting at multi decade highs at the same time.
Treasuries sit underneath almost everything in the financial system.
Mortgage rates, corporate borrowing costs, and government debt are all priced off these yields.
So when the Treasury market gets unstable, the stress doesn't stay in bonds only.
🚨 Another day, another multi decade high for US bond yields
Interestingly, US10Y, US20Y, and US30Y have all jumped by 40 bps on average ever since the Treasury Secretary said "I am the house now, bet against me if you dare"
US10Y is now the highest since 2007.
US20Y and US30Y are both the highest since 2002.
Turns out the bond vigilantes took that dare.