🚨 THIS IS NOT NORMAL
The U.S. 30-year Treasury yield just hit 5.52%.
Highest since 2004.
And it gets worse every day:
The Treasury already TRIPLED one of its long-term bond buybacks to $6 BILLION.
And yields are STILL going HIGHER.
Something doesn’t add up:
WHO IS GOING TO BUY THE NEXT WAVE OF U.S. DEBT?
Japan has been one of the largest buyers of U.S. Treasuries for decades.
Now Japanese yields are above 3%, and Japanese investors have already sold roughly ¥3 TRILLION of overseas debt this year.
China is doing the same thing.
Its Treasury holdings fell from roughly $696B to $618B in one year.
Meanwhile, hedge funds are becoming increasingly important buyers of U.S. government debt.
And that changes the game.
Central banks buy Treasuries because they NEED reserves.
Hedge funds buy them because the TRADE pays.
When the trade stops paying, they leave.
That means the marginal buyer is becoming much more PRICE-SENSITIVE.
And Fed Governor Christopher Waller just said something almost nobody noticed:
The historical “safety premium” on Treasuries is basically gone.
Investors want to be PAID to hold U.S. debt for 30 years.
If buyers demand 5.5%, Treasury pays 5.5%.
If they demand 6%, Treasury pays 6%.
The Fed controls the short end.
It does NOT control what the market demands for 30-year money.
And this can feed on itself:
Fewer structural buyers → higher yields → higher interest costs → more borrowing → more Treasury supply → higher yields
Treasury buybacks can help LIQUIDITY.
They cannot create long-term demand.
And if the 30-year keeps moving higher, this doesn’t stay inside bonds.
Stocks. Real estate. Bitcoin. Everything gets repriced.
Remember, I’ve been trading markets for over 15 years.
I’m watching where the biggest money moves BEFORE it reaches stocks and Bitcoin.
When I see the next major shift, I’ll post it here like I always do.
Turn notifications on.
If you’re not following yet, you’ll understand why that was a mistake later.
BREAKING: The US 30Y Note Yield rises to 5.44%, its highest level since June 2004.
We are nearing a +500 basis point gain from the 2020 low.
Where is the US Treasury?