Written on 5/19
This morning I woke up at 3 AM to let the dogs out. Not unusual there are bunnies in our neighborhood so sometimes they find the need to make sure they are not near the back fence.
At 6:30 AM my daughter came in the room as I was getting ready for the day to let me know our dog Bonnie was in an active fight with a fairly large possum that was now wedged in the back fence.
Today, I have to leave work at noon to go get her groomed so I can see if this possum bit her or not, the fight and recent rain made her too dirty to tell right away.
Now that I am done with personal updates.
Today the 30 year Treasury hit 5.17%. For context the last time this happened was in 2007 right before the global financial crisis. I am not intending on scaring you here but rather explaining what this signal may mean. It is a signal the bond market is giving us.
Getting your hands on money may be harder to do than it was in the past. So you will have to pay up if you need financing in the future.
This could be because of inflation eating away spending power. We got proof of that last week when the inflation print we got on 5/13/26 showed 6% YOY monthly inflation increase, the sharpest since 2022. More money is going to the rising cost of things means that more people need to borrow money and so money gets more expensive.
It could be because the U.S. is in a lot of debt. And to make sure they can sell bonds, (this is how they borrow more money) they will have to pay more for it. Have to, they are in debt without enough money to pay all their bills so they have to pay higher interest just like you do when your credit is bad. – Technical jargon here is massive federal deficits and very high government refinancing needs.
It could be because the Federal Reserve may need to raise interest rates to attempt to slow inflation instead of reduce interest rates. That means it will be harder for your cost of living because you would have to pay more for your financing on any upcoming home or any vehicles. The more pressed you are in your budget, the less hopeful the outlook on the economy is because our economy revolves around you. The consumer. – Techical Jargon QT instead of QE
This may mean that some people are going to prefer to buy bonds, and they will sell their stocks to buy bonds. That would make stock prices go down.
Good for you if you are young and still purchasing stocks for retirement but expect that your statement may be lower as volatility in stocks starts to creep up.
It’s a signal worth paying attention to. More people will be wanting to borrow money so you will have to pay more for it.
If you are an investor more people will be interested in paying you higher interest to borrow your money.
Thanks for taking the time to read my blog, and please share any possum stories you may have. Mine rearranged my entire day.
Yesterday I had a glam team in the AM and was headed to a photo shoot with my creative director. Today I was in the middle of a possum vs. dog fight. Both at 6:45AM ish one day apart from each other.
This is how you live the dream. Ha!