That’s the highest in 19 years and 22 years respectively. 
Today, long-term yields hit the highest levels in decades.
Chart yields are from a bit earlier today, with yields now slightly lower.
The 10-year is 4.991 percent as I type with the 30-year long bond at 5.361 percent.
Mish on Zandi Yesterday
Bianco on Zandi Today
Bianco Part 2-3
Bianco Part 4-5
Bianco: “If it doesn’t cut tomorrow, it risks the market continuing to reject this easy policy; yields could soar.”
I believe he means “If it doesn’t hike tomorrow, it risks the market continuing to reject this easy policy; yields could soar,” and that is what I stated as well.
The Fed is woefully behind the inflation curve and the AI-bubble curve, once again blowing bubbles.
The Fed Will Get the Blame
When something bad happens, and it will eventually, everyone will blame Warsh.
But the policy error is as Bianco stated.
“The Fed made the mistake two years ago by cutting rates, and the market has been rejecting it through higher yields from 2-year to 30-year.”
Political Realities May Force the Fed to Hike in September
On August 31, 2026, ahead of the jobs report, I commented Political Realities May Force the Fed to Hike in September
It will be a stretch for the Fed to pause for many reasons, not just the CPI.
Even if the report is weak, a headline CPI of 0.4 percent will be hard for the Fed to ignore.
Politics is another huge hurdle that will force a hike sooner rather that later.
Jim Bianco’s tracking model places the FOMC in a rigid 5-5 gridlock, thrusting former Chair Jay Powell out of the background and directly into the role of the ultimate swing vote.
……
Conclusion: The Strategic Imperative for September
The upcoming September meeting represents the Fed’s cleanest and most viable window to execute. [It will not want to hike in October, days before the election]
Unless the jobs report is miserable and the CPI is tame, look for Warsh to hike rates in September.
To avoid any look of politics or uncertainty, I think Bianco will be wrong on the number of dissents, say three or less.
The Fed hikes tomorrow. We will find out the number of dissents. My guess now is no more than two.
Regardless, Bianco and I are on the same side of the fence, for the same reasons.
At what point does yield curve control by the fed get implemented? This is the ulitimate ending, ie inflate our way out of this. The only remedy ever used throughout history. It is coming. TIc tic tic. The real question is when what currency is there to go to? Pretty much most industrialized countries are in the same boat fiscally.
The Trumpocalypse is right on schedule. The world will be in a great depression by the time he leaves office if not sooner.
“It’s Trump turtles all the way down and inflation all the way up!”
Got popcorn?
A hike is pointless performative art. It will do nothing, If it does do anything, it will be to fuel even more inflation through job losses, market losses and, ultimately, even higher deficits, The US is an emerging market country now, The only way out is through incredible pain.
This just screams the end of the Ai bubble and this administration.
Big bubble and a corrupt idiot won’t end well.
DOGE was a lie.
Ending wars was a lie.
Tariff revenue was a lie.
Trump is a liar, war monger and pedophile.
Iran is shutting down worthless government services (US bases in the Middle East) faster than DOGE ever could.
You ain’t seen nothing yet!
Just wait till the credit downgrades start cascading in
WTI just hit $106 again on its way to $150. Thank Trump and his senseless war!
This interest rate increasing issue is not going to stabilize unless Congress cuts spending to less than revenue. Congress now forces treasury to issue about $2 trillion in new debt every year; stated another way there is $2 trillion in new bills, notes and bonds that need to be sold to fund government. When supply increases price goes down. When you are in a forced need for money, you have to pay higher interest to meet the need.
All this is coming to fruition now because pawning inflation on the world has come to an end. The world sees the US currency for what it is, fiat being printed into worthlessness. The dollar backing, namely faith in the US government, has been squandered. Foreign central banks are increasing gold holdings to preserve wealth, which lowers demand for US debt that is also pushing interest rates up.
Basically, many purchasers of US debt are now refusing to buy unless compensated for loss of purchasing power. If the fed tries to keep rates low on any and every term, they will need enforce their decision with purchases using printed money and that will only exacerbate the inflation problem, causing private debt purchasers to require even higher interest rates or they will not participate. It is the reason the fed is impotent and congress must act
If a President is serious about ANY deficit reduction he would:
1.) Submit a far more balanced budget to Congress. Not one with bigger deficits. Congress has NEVER led. That is up to the President.
2.) Not include “Sunset provisions” in their tax bills to present what becomes fake numbers
Congress has NEVER led? Did you forget the “Contract with America” and Speaker Newt Gingrich?
It’s refreshing to see posts from Curvewatchers Anonymous and that the error was the cutting of the rates, surely the 50 bps and 25bps in late 2025 were unwarranted by the Trump-defier /sarc Jerome Powell.
Glad to see another commenter mention that it’s good to see a more “normal” rate return. There is nothing normal or right about a ZIRP or low interest rate. Optionality and opportunity cost require a positve real rate and the suprression of rates to engage in financial repression has put us at variance with sanity/normality for a very long time.
As The Bird put it…5.3% on the 30 year is still too low in a 40 Trillion federally indebted world.
Thank you our deranged dictator for destroying the USA in a brief period of time. Some neighbors have returned from overseas vacations. Their primary comment was “they hate us in these other countries.” Well done, taco.
Tony, we were over at our home in Portugal and our closest friends, whom we have known for quite some time, were universal in their comments to us, in so many words:
“We feel for ya, DH! How can you stand to listen to the guy?”
My reply was: “We don’t.”
Once I tell them I’ve voted Libertarian since 1988, they are chill with me.
Their primary comment was “they hate us in these other countries.”
They should.
“It’s beginning to look a lot like..Trump has created a bearish bond secular trend!”
Add 1st part: ME Wars and energy problems
Add 2nd part: US Credit Negative Cycle from Unending Fiscal bust (coming in 3 yrs +/- 2 yrs per Dalio &/or inevitability)
And walla! We have serious mid-to-long end Treasury bond Bearish issues that make this a negative secular – not just another cycle – downturn.
We had roughly a 30-yr down cycle in long rates where we could dip in the well with a Fed Rate cut to stimulate the economy every downturn. The Bond Vigilantes aare starting to say that paradigm is fleeting.
Fiscal Policy has long been at risk of being driven by Monetary Policy from deficits. The Piper is coming for us to pay this bill.
As I’ve said, and the late great Paul Volker pointed out, if you let the Inflation Boogey Man out of the cage (uncontrolled) the consequences of trying to get him back in the cage are far more difficult. Thus HE tighted when damned straight inflation was largely again from an exogenouse event – The OPEC Oil embargo (in retailiation for our taking in The Shah for Med treatment. Gen X reminder.) Thus, although we are slowing the Fed has no choice. Paying the Piper later is FAR more costly in lost Fed Bond Market Credibility.
And B4NI.DE, proxy for Diesel, up 4.5% today, that would equate 6.50+ a gallon …
Will Trump sign an EO to limit the 1.5+ million barrels of diesel exported daily?
I’ve been arguing for this (as much as I don’t want my refiner stocks hurt!). But, considering he’s always happy to step in poop (i.e. tariffs) this should be a no brainer. Which qualifies Trump not to do it.
IF he does it it’s only b/e the midterms held his feet to the fire. IF.
I am actually happy to see rates where they are – it is long over due. People have forgetten what a “normal” interest rate environment looks like. I’d even argue a 5.35 30yr is still too low.
I agree, and it is far easier for me, who bought his first Stick House in 1984, where we paid 12% interest on a modest starter home under $120K in Cal. 1500 Sq Feet, 1/4 of an acre, OUT OF TOWN far from WORK because we could not afford a CITY home. We moved 45 mins away from my job. Commutes were terrible.