You're in the Wrong Town

Equities are lethargic and mixed, overall, in front of both HIMS PLTR earnings this evening (two of the more prominent growth plays of late) and then the FOMC on Wednesday. 

However, you will note rates on the long end of the curve pushing higher yet. With the Trump Tax Bill pending, meaning that Treasury Secretary Scott Bessent has vowed that Congress will pass Trump's "big, beautiful bill," which promises multiple tax cuts, by the Fourth of July, it is difficult to see bond bull case given that the technicals on Treasuries (bond prices, inverse to rates) remain bearish on all timeframes. 

And now it seems as though the White House is already abandoning its initial hard-line "DOGE" strategy to reduce a bloated federal government, overall. 

Despite all of these issues, sentiment on bonds remains firmly bullish, garnering long interest from both deflationistas and Goldilocks proponents. 

As we have noted here and with Members many times over the years, even though the bond market has, essentially, been in a long-term slumber for decades, it is the epitome of a sleeping giant one ought not disturb too much--Just look at the 1970s for reference. Indeed, Warren Buffett himself indirectly alluded to this over the weekend at the Berkshire Annual Meeting, which will be his last as acting CEO. 

Many investors, politicians, market pundits, and policy makers fancy themselves cutthroat "killers" in the realm of finance. But let us be clear: There is only one true killer in this town, and that is the bond market. Should rates on the long-end spiral higher (i.e. back over 5%) with both The Fed and federal government losing control, you can expect that many of the public figures most hold in high regard now will be humiliated with enough eggs on their faces to spread a breakfast buffet at Caesars Palace in Las Vegas.