Will the bond market eventually wake up and scare the bejesus out of Congress? 

By Wolf Richter for WOLF STREET.

Bond

Vigilante’s

Running to the Sound

Of Massive Government Spending! 

Fears of higher inflation, fears of a lax Fed, and additional years of unspeakable fiscal madness – are anathema for the bond market.

Except that the bond market has been sleeping through the first few innings of this anathema. It briefly woke up in the second half of 2023, but then dozed off again. And now it woke up again? Maybe just a little?

The last time the bond market was wide awake, nervously watching inning after inning of anathema, was in the late 1970s through the early 1990s, when the 10-year yield was mostly above 8%, and for some years much higher.

DYI:  As Presidential (both parties) and Congressional (again both parties) continuing their spending like drunken sailors this will favor – in this order – silver, short term notes, and gold.  All other assets monitored by DYI will decline in a saw tooth manner as long term bond yields increasing out compete for long term returns.

Smart Money - Buys Aggressively!

Capitulation

Despondency

Max-Pessimism 

Depression 

Hope - Silver F

Relief *Market returns to Mean  - Short Term Notes & Bills or MMF

Smart Money - Buys the Dips!

Optimism - Gold

Media Attention

Enthusiasm

Smart Money - Sells the Rallies!

Thrill

Greed

Delusional

Max-Optimism  Residential Real Estate   - Stocks -BitCoin 

Denial of Problem  

Anxiety 

Fear

Desperation - Long Term Bonds

Current Economic Conditions

Prosperity - Moderate

Recession - Shallow

Deflation - None

Inflation - Moderate

Economic Choices

None

Shallow

Moderate

Prominent

Extreme