Markets Weekly August 15, 2026

Summary

Joseph Wang discusses why the long bond is behaving poorly despite benign inflation and weak economic data. He attributes persistent upward yield pressure to global yields, term premium, and a refined-product energy shock, while refuting the supply-indigestion story. He likes long bonds above 5% but expects a durable bid only after equity cracks, and he remains cautious on equities.

• Long bond yields have climbed to about 5.25% and keep retracing post-data rallies.
• Benign CPI/PPI, weak retail sales and weak payrolls briefly lower yields but yields immediately rebound.
• Rising long-end yields abroad, especially in Euroland, are pulling US yields higher.
• Reduced refinery capacity is pushing gasoline futures higher even though crude oil is well behaved.
• Term premium and Fed uncertainty are pushing long bond yields up; supply indigestion is not supported by swap spreads.
• He sees 30-year TIPS real yields near 3% as attractive.
• He expects a bond bid only after equity market cracks and remains cautious on stocks.