US US30Y US 30-Year Treasury Yield Loading... : Investor Sentiment and Bull/Bear Views

Snider argues that higher long-end Treasury yields reflect the market repricing central-bank interference at the short end after the zero-rate era. They do not reflect deficit fears, dollar debasement or inflation; TIPS breakevens and swaps show no accelerating inflation risk. He expects government bond yields to fall through the rest of the decade. If the credit downturn deepens and involves AI, he sees the 30-year moving quickly from about 5.5% to 4.5% or even 3.5%. He explicitly suggests buying duration as a hedge against stock-market downside, since bond yields follow growth and inflation expectations, which would fall in a downturn.

Fiscal policy in the U.S., France, and the UK is out of control and central banks are no longer monetizing all that debt, so long-term government yields should rise. With no political solution to growing deficits, Hoenig says investors should be wary of long bonds because prices may fall further.

Persistent energy-driven inflation, with Brent around $110 and natural gas surging, keeps upward pressure on Treasury yields. He expects the 30-year yield to reach 6% and the 10-year to reach 5.50%, which would raise the cost of capital.