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Message
I asked grok how much did the bond market gain last week.
Posted on 4/5/25 at 8:34 pm
Posted on 4/5/25 at 8:34 pm
Conservative estimate provided by grok is $3 trillion just last week.
Why is this important?
Because the U.S. treasury has to refinance $9.25 trillion in debt this year and 70% of the 9.25 trillion is front loaded between January and June. We are in the midst of refinancing most of the debt due this year.
Why is there so much debt due this year?
Because Janet Yellen sold much more than the usual amount of short term T Bills. Kind of a vindictive move by the prior administration.
Anyway the fact that $3 trillion moved into the bond market last week is a really healthy sign. It means US debt is being refinanced without Federal Reserve intervention (printing).
This is deflationary. We need monetary policy to bring prices down a little.
Why is this important?
Because the U.S. treasury has to refinance $9.25 trillion in debt this year and 70% of the 9.25 trillion is front loaded between January and June. We are in the midst of refinancing most of the debt due this year.
Why is there so much debt due this year?
Because Janet Yellen sold much more than the usual amount of short term T Bills. Kind of a vindictive move by the prior administration.
Anyway the fact that $3 trillion moved into the bond market last week is a really healthy sign. It means US debt is being refinanced without Federal Reserve intervention (printing).
This is deflationary. We need monetary policy to bring prices down a little.
9
Posted on 4/5/25 at 8:35 pm to GumboPot
Roger doesn’t care, still drunpfs fault
Posted on 4/5/25 at 8:37 pm to GumboPot
I’m not privy to all of what you’re explaining, but I like the way it sounds.
Posted on 4/5/25 at 8:38 pm to GumboPot
This is WAY over the heads of the folks with TDS.
Posted on 4/5/25 at 8:40 pm to TigahTeeth
quote:
I’m not privy to all of what you’re explaining, but I like the way it sounds.
Last week about $3 trillion left the stock for the bond market.
The increase in the bond market with a corresponding drop in equities is not a 1 to 1 ratio.
Posted on 4/5/25 at 8:43 pm to GumboPot
Posted on 4/5/25 at 8:46 pm to TigahTeeth
Translation: the prior administration did there best to blow up this country. There’s now a bigger picture involved than what most people understand, especially the inept press
Posted on 4/5/25 at 8:48 pm to Padme
I’m confident that a good portion of the press have no idea how bonds work.
Posted on 4/5/25 at 8:52 pm to GumboPot
I even wonder if Trump gathered his inner circle, including Bessent, and said, ‘okay, priority #1, how do we get the 10year down?’
And he probably added: we can’t count on Russian’s boy Powell
And he probably added: we can’t count on Russian’s boy Powell
This post was edited on 4/6/25 at 2:04 pm
Posted on 4/6/25 at 7:37 am to Padme
Correct, Yellen did it on purpose, no two ways about it.
Posted on 4/6/25 at 8:59 am to GumboPot
Any links on this? I’d be curious to read more and share
Posted on 4/6/25 at 9:08 am to GumboPot
quote:
When interest rates inevitably rose in 2022, the U.S. government was forced to refinance at significantly higher rates, which cost taxpayers hundreds of billions of dollars. It was an error of judgment that most of us cannot even comprehend—if interest rates are close to zero, you lock them in for as long as possible. It's no different than refinancing your mortgage at 2.5 percent, as millions of homeowners did during that time period. It's common sense.
The Biden admin completely fricked us.
Remember this when the usual suspects cry about Trump.
quote:
Now, incoming Treasury Secretary Scott Bessent will be faced with the prospect of terming out the debt to longer maturities in the event that rates rise even higher than they are currently.
This will be painful. The United States finances itself through debt auctions. As Bessent sells more bonds at 10-, 20-, and 30-year maturities, the increased supply of bonds will cause long-term interest rates to rise, which will mean that we will all be paying higher interest rates on mortgages and other long-term borrowings. But the failure to do this could be catastrophic. The debt is a national security issue—at 123 percent of gross domestic product, we are at risk of a financing squeeze, where short-term rates rise rapidly and lead to a debt spiral from which there is no escape.
This post was edited on 4/6/25 at 9:11 am
Posted on 4/6/25 at 9:22 am to baldona
quote:
Any links on this? I’d be curious to read more and share
Hard to find MSM articles but there are may YouTube videos and X posts discussing the topic.
This was the structure of U.S. debt 3 weeks ago. I said $9.25 trillion in the OP that needs to be refinanced and I heard that number from U.S. Treasury Secretary Bessent. More accurately it looks like $9.2.
The video is three weeks old here but the message is still rings true:
Posted on 4/6/25 at 9:44 am to GumboPot
This guy had a few comments that gave me pause but he makes some decent points
I do not think trump is playing 17d chess. I do not think that trump wants a recession under any circumstance.
I do not think trump is playing 17d chess. I do not think that trump wants a recession under any circumstance.
Posted on 4/6/25 at 10:14 am to Riverside
quote:
This is WAY over the heads of the folks with TDS.
I've heard this talked about on All In for months now as well as the Bessent and Lutnick interviews 2 weeks ago and it is still way over my head
It was essentially an attempt to prop up a fake economy under Biden and dump the crash on Trump, yeah?
Posted on 4/6/25 at 10:17 am to Hodag
quote:Explains why our prolific economic giants with a combined nearly 750,000 posts haven't chimed in.
I've heard this talked about on All In for months now as well as the Bessent and Lutnick interviews 2 weeks ago and it is still way over my head
Posted on 4/6/25 at 10:22 am to SlidellCajun
quote:
I do not think trump is playing 17d chess.
It's not 17d chess.
It's making the the right macro economic moves to refinance the $9.2 trillion in debt due this year.
Approximately 3 trillion moved into the bond market last week pushing bond prices higher (and interest lower).
This is MASSIVALLY healthy.
Why?
Because the U.S. debt refinancing is coming form dollars already in circulation, which is deflationary and the Federal Reserve does not have to step in and buy the bonds (i.e., printing) to prop up their stated interest rate goals (which would be inflationary).
The yield curve is inverted right now. The Fed's Fund Rate is 4.33% and the 10 year note is under 4%. The only debt instrument trading in line with the Fed's Fund Rate is the 30 year bond.
Posted on 4/6/25 at 10:29 am to Hodag
quote:
It was essentially an attempt to prop up a fake economy under Biden and dump the crash on Trump, yeah?
It certainly looks like that. Look at al the short term debt (T-bills) that Janet Yellen sold in to the market (9.2 trillion) that became due this year. She really front end loaded the U.S. Treasury's bond portfolio trying to trap the Trump admin in one of two ways:
1. Force an inverted yield curve and an ensuing recession.
2. Force the Federal Reserve to print which would be inflationary.
The Trump admin as chosen number 1 and trying to make it quick. Number 2 would just be painting over a bad situation and the inflation would continue.
Posted on 4/6/25 at 1:39 pm to GumboPot
Has this affected the stock market currently? I’m trying to understand the impact on private equity?
Posted on 4/6/25 at 1:56 pm to Jbird
quote:
Explains why our prolific economic giants with a combined nearly 750,000 posts haven't chimed in.
Trump may actually have experience & knowledge in refinancing debt
he might be close to SFP’s level in knowledge over there
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