It’s time to discuss the real possibility of a renewed surge in inflation. 
On a monthly chart, the long bond yield is approaching but not quite at a two-decade old resistance near 5.25 percent.
Ascending Triangle
On a weekly basis, the 30-year long bond is is an ascending triangle pattern.
Technically, the expected resolution is higher. A move above 5.09 percent would be a breakout. Long-term resistance would then be short step away at ~5.25 percent.
The short-term view looks ominous.
30-year Long Bond Last 12 Months
Across all time frames, yields look poised to rise, technically speaking. Short-term, we have seen a breakout from the apex of the symmetrical triangle near 4.80 percent.
The long bond was up nearly 8 basis points today to 4.915 percent. The next resistance is 5.09 percent, with long-term resistance at 5.25 percent.
Technically, the setup looks stagflationary.
Supporting the Stagflation View
- The price of gold, silver, and copper at record highs
- Medical insurance prices
- Wars and threats of war by Trump
- Deficit spending, which both parties want to increase
- K-Shaped Economy fueled by upper-end spending
- An AI speculation boom with no profits
- Tax refunds will support more spending
- Minimum wages hikes in 19 states will support more spending
- Trade wars
- Weak jobs
This is one sick economy led by AI, upper-end spending, and deficits.
It’s possible a collapse in jobs sinks the economy enough that demand crashes. Also, a stock market crash would kill demand at the high end. And we could see a big decline in the price of rent.
Two Market View
- Long Bond: Technically and fundamentally the long bond and gold charts appear to be signaling stagflation.
- Fed Fund Futures: However, the Fed Fund Futures expect two more rate cuts this year, in June and November or December. This is the near-universal consensus.
I am not predicting a hike, but it would not surprise me much.
Contrarian View
A hike does not seem to be on anyone’s radar. So please consider Bob Farrell’s Rules of Investing.
Rule #9: When all the experts and forecasts agree – something else is going to happen.
Who else is discussing a hike?
Coming Up
I will do another post on gold and silver shortly. I also have an update on the cost of medical insurance from a Personal Consumption Expenditures (PCE) point of view.
The PCE is the Fed’s preferred measure of inflation.
I expect to see a big divergence between the PCE and the CPI and will explain shortly.
The Fed says it is in a good place. That I am sure is wrong, one way or another.
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Natural gas futures jumped 25 percent today.
January 15, 2026: Real Average Hourly Earnings Have Been Negative for Five Months
Wages are not keeping up with inflation.
“An AI speculation boom with no profits”
Citicens of Monterey Park CA were up in arms at a city hall meeting yesterday, over a proposed medium size data center proposal for the city.
There is no way to see a hike even if inflation go up back to above 3, the fed is no longer independent, the market will crash and the new fed candidate is around the corner… the cpi and pce are just noise starting may they will claim no inflation and start cutting rates and the dollar takes a dive.
Who writes this $hit?
No rate change as the Fed Funds rate remains about 1% higher than annual inflation rate as far as .maintaining a safety margin.
Some people say China is in a depression because of the rise of the technology:AI’s massive introduction may be used to balance money printing and bring down some inflation in the us.
When will US debt get another downgrade?
Gold just hit $4.870 in the overnight session up another $103 since the market closed today.
Got mining stocks and a few stacks?
Gold/Dollar ratio is a downgrade of US debt. In a recent auction the Fed had to buy $40 billion of treasuries.
i re read this. good stuff. like your analysis back in the day when you nailed deflation before the panic of summer of 2007 and fall of 2008………….keep it up. you are rocking and rolling. the empire crumbling under nazis adds another twist. 9.11.01 was the first direct hit militarily against the empire. empires take decades to crumble. it ain’t a movie.
Make a substantial profit / protect your wealth from once in a life time EMPIRE crumbling.
we have. you too, old sport.
All that technical analysis is basically confirming TACO will get his lackey confirmed as fed head and the Chicago fed president will get fired and replaced by another Trump lackey, then we will get more than two rate cuts. I expect rates go down till the inflation genie and his whole family are out of the bottle leading to an extremely difficult task getting them back in.
Reading between the lines, Powell has until May to raise rates. After that Taco is in charge.
Steven Miran is getting super excited for negative rates
Yields are probably up today because of overseas selling. That will continue together with fewer buyers at auctions. The next rate move might be a hike but more likely to support the dollar rather than fears about domestic inflation. Trust in US Treasuries as a safe asset is disintegrating. The only thing saving them at the moment is the high recommended weighting in portfolios. I’d expect that to be seriously reviewed in the light of geopolitical tensions.
TACO only listens to the bond market and stock market.
I’m expecting softer tone.
I doubt any short term moves are going to change overall foreign sentiment. They’ll be huge momentum behind the scenes to reduce the risk of the next inevitable crisis.
The bond market has made the Fed look bad. After 6 rate cuts, the yields on the 30 year bond are higher than the day all rate cuts were made. The yield on the 10 year bond is just a little lower than when the Fed started its rate cut cycle. The Fed is going to have to raise rates even for Republicans to continue to support its existence.
The resistance on the 10 year bond yield chart was broken Friday and confirmed today. It is also significant the yield blew past the 200 day moving average.
Yields for the “18 month” cycle bottomed in late October 2025, and is running 13 a very short months. I think the “4.5” month cycle bottomed (as well as all shorter cycles) on January 14-15th. With so many cycles now coming out of their lows and the yield moving higher very quickly after a month of consolidation, the larger cycles are strong and or are inverting. A regular cycle looks more like a hump (flags and pennants), and an inverted cycle looks more like a bowl (parabolic). I would expect inversion over the long term as the “60” year cycle approaches its highs in the 2040 time frame.
Unless you’re highly attuned to financial markets, most people correlate interest rates to a 30 year fixed mortgage rate. The Fed has been buying 30 year mortgage-backed securities to suppress rates and loan servicers have onboarded loans with lower rates precisely because the perceived risk of “runoff” (refinancing) has lessened. The spread between the 10 year treasury and 30 year fixed mortgage rate has tightened. This keeps the common person even more ignorant than usual about the danger of our fiscal profligacy.
Yep. Trump has accelerated what was coming and this isn’t an accident. I predict we will be in a depressed economy and martial law by November 2026.
I used to think that was wild exaggeration.
GOOD ODDS ON THAT OCCURRING. BEEN THERE. SEEN IT.
Absolutely! Based on the recent breakout from congestion, it appears interest rates are poised to go higher. If short-term T bill rates rise, the Fed will follow just as they always have. The Fed controls NOTHING. They simply react to what’s already happened in the market.
Good luck with your own personal financial (planning) future, if you think the Fed doesn’t lead short-term interest rates
Fed controls the short term rates and uses short term borrowing to buy 10 years bonds.
I’m very skeptical of this notion. The Monetary base is declining in the most recent period in spite of the Fed having resumed printing. M2 has decelerated to 4.2% annual growth. I think the fed sees the economic stagnation it needs to fight, and the only tool (it perceives) is creating money ex nihilo.
The MB is not a base for the expansion of the money stock. It includes currency, where an increase in the currency component is contractionary. The FED has eased monetary policy.
The stock market needs to drop by 20% to clean out all the K-shaped economic garbage that’s been floating around.
So you’re saying we can remove the excess by going WAY WAY back to May 2025?!
Or, disregarding the tariff dip/spike 20% would take us way way way back to September 2024?
Taking out 16 months of gains is not going to clean out the K-shaped economy. Now the question to you is do you think it will or do you even want it to go back to the level that WOULD clean out the excess? 30% would only take it back 2 years, to Feb 2024. That might be a start but when the returns are nearer 15+% for 16 consecutive years, I don’t see how 20-30% clears out all that much excess. Might blow off some of the froth perhaps.
However I agree strongly with the premise. The 401k/IRA brought Average Joes/Janes into the market and now they are complicit in wanting it to not decrease. The last 16 years have made that statement morph into “wanting it to not decrease EVER AGAIN”. Understandable when long duration participants have or are about to retire.
Until the markets roll over there’s a huge populace that will view inflation as annoying instead of the sininster, destructive, pernicious it force it has exerted everywhere, into all policies and unwinding any chance of happiness. Those on real estate or stock portfolios aren’t yet onboard with your prescription to cure things. They may not have a choice but to watch their passive gains get wiped away. Then they too will see what inflation means without the backstop of passive monetary war chests.
It is electronic money keeping the system alive in the first place. Does anyone really think these derivative markets actually have real money ?
The derivatives market is enormous, with notional values often exceeding $1 quadrillion, but its size varies dramatically by measure; recent Bank for International Settlements (BIS) data shows Over-the-Counter (OTC) derivatives having a gross market value of around $21.8 trillion (June 2025) and notional values reaching $715 trillion (June 2023), while some analysts cite figures over $200 trillion in total bank holdings, highlighting the difference between easily traded contracts and total underlying contract value.
It’s set to drop a whole lot more. The 3 AI meme stocks that lead the rally over the past could of years are in trouble.
NVDA and ORCL have been in an ending diagonal since the end of November. They could still be completing the last up segment, but today’s selling makes wave 4 larger than wave 2, so the ending diagonal has probably truncated on several degrees. Crash ahead.
AMZN could still be in an ending diagonal that started in August 2024. AMZN falling to $215 before reaching $255 really strengthen the bear case.
When you look at insider trading for these big tech stocks, it is a sea of red. NVDA, AAPL, META, etc.: all these dudes are selling. Jensen Huang has sold a crap-ton of NVDA. I have never been good on timing, but if I were, I’d throw a little money into some long-dated puts in a few of these stonks.
2008 is my playbook until I see something different. It is possible stagflation will transition to a breakout in yields. But I think the financial markets break and a massive flush of dead capital commences. Or Trump could do another TACO bailout in which case 7% and higher yields are on the menu.
The fed has lagged so far and so long behind any real time changes in the economy that it becomes a coin toss and often pointless. I believe long term (4+ years) inflation will surge due to demographic and labor issues, I’m talking about 70s style inflation in the low double digits.
Here’s a chart preview, probably won’t match exactly but it will be very similar.
https://www.principalam.com/us/insights/macro-views/us-inflation-important-lessons-1970s
if the amerikan economy implodes by stagflation and isolation and lunacy…….you might come back and buy r/e with 20% cap rates or stocks or businesses down 70 percent down from here………..i lived in a hood where the r/e prices fell 75% from 2005 to 2011. it was brutal for my neighbors and friends. i had half my net worth in gold and silver and picked up rentals with over 20% caprates. i’d rather not live through that again, but i think this might be nation wide ovder the next few years with this lunatics running the asylum of war mongering nihilists we have as our population.
That’s the plan! I don’t remember if it was Plan B, C, D, E, F, or G.
I hope you got an escape plan, just in case!
The ensuing trumpletantrum would be epic.
It should be.
Make sure the humidifier is working before that cold front moves in.