Could Treasury Yields Break the AI Boom?

Summary

Jesse Felder explains why rising 10-year Treasury yields are the most important warning signal for markets, indicating a slow-motion debt crisis and threatening the AI-driven rally. He sees the AI bubble as beginning to end, driven by impaired speculative capital and poor earnings quality. He recommends hiding in short-term Treasuries, staying long gold and oil/energy, and rotating into value stocks as momentum breaks.

• The 10-year Treasury yield is the most important chart; a breakout higher would signal a bond market loss of confidence and trouble for equities.
• The Fed is behind the curve by up to 300 basis points and may face a series of rate hikes, tightening financial conditions.
• The AI bubble is in its final blowoff, with levered retail momentum trades collapsing and hyperscaler earnings quality at historic lows.
• Short-term U.S. Treasuries offer a safe yield haven, mirroring Warren Buffett's $400 billion position.
• Gold has corrected back to fair value and is positioned for the next dovish Fed pivot after a consolidation phase.
• Oil is historically cheap relative to gold and other commodities, with fundamentals supporting a move above $100 per barrel.
• A historic break in the momentum factor is driving a rotation into value stocks, similar to the post-dot-com period.