u/BGID_to_the_moon

Bessent’s Treasury purchase only briefly lowered the 10-year yield, and the move largely reversed the next day. Inflationary fiscal policy and heavy government borrowing argue for higher long-term yields, which pressures long-duration bonds like TLT. Fade the Treasury-driven bond bounce unless Bessent’s policy signals become consistent. Direct Treasury buying could artificially suppress yields, and a growth scare could spark a safe-haven bid into TLT.

IWM contains many profitless small-cap companies that are highly sensitive to rising oil (input costs) and rising yields (higher discount rates), yet it is near ATH – similar to the setup that crushed these stocks in 2022. The market’s current indifference to these negative macro factors represents a divergence that historically resolves with a sharp revaluation downward once the lag effect of higher costs hits earnings. Shorting IWM captures the expected mean-reversion as the underlying economic reality (high oil + high yields) eventually overwhelms the artificial support. Government spending or money-printing could sustain the rally; earnings season may surprise to the upside; the war premium may fade again.