The Writing on the Wall

Just because we know the daily rumor mill will keep heavily churning indefinitely does not make this type of market regime any less exhausting and tedious to trade on a daily basis. It certainly seems as though the White House does not feel it can afford to take one single trading day off from sweating the tape to focus on other issues, as we have been hit again today with a barrage of headlines about Trump willing to back down on certain sanctions regarding Iran in return for them negotiating their nuclear aspirations.

Of course, if rates and oil had not been higher on the session at the time of the headlines I doubt we would have seen the rumor mill churning out breaking news in the first place. 

But we are where we are. And with the long end of the curve still pushing two-decade highs you can be sure the Administration will be concocting whichever magical headline potion they can in order to stem the tide in the bond market. 

However, as I have long suspected, the writing is on the wall.

Once we got the multi-year breakout for rates on the 10-Year Note underway, a chart (TNX) I have repeatedly posted here and with Members, there has been a certain degree of inevitability that a bond market crisis is brewing. And the only way to truly crush inflation at this point is with a deep depression to bring about monstrous deflation--Not disinflation with a baby rate hike, not the Treasury Secretary smirking and trying to bully the bond market, and certainly not the President exhorting The Fed to cut rates by 100 basis points. 

The soft landing was always a mirage in the middle of the desert, which led to misguided praise of Powell and spawned historical complacency regarding this inflationary regime. 

But, hey, at least AMC is breaking out today.