Countries Dumping USD? Failed Treasury Auction: ‘Things Are Just Warming Up’ | Steve Hanke

Summary

Steve Hanke, professor of applied economics at Johns Hopkins University, argues the US is likely entering a recession with over 90% probability due to money supply contraction and tariff/regime uncertainty. He expects S&P 500 earnings estimates to collapse and stocks to fall further, calls the recent Treasury auction a failure, and sees investors moving away from US assets. He remains positive on gold as central banks buy it, agrees the dollar is falling, and warns bond market stress could force Fed bond buying.

• Hanke puts US recession odds above 90% this year.
• He says money supply contraction since 2022 and tariff/regime uncertainty are the one-two punch.
• He expects S&P 500 earnings growth to drop to zero or negative from consensus 10%.
• He calls the recent Treasury auction a complete failure with weak primary dealer and foreign central bank demand.
• He says the 10-year yield above 4.5% threatens the federal budget and may pressure the Fed to buy bonds.
• He agrees with Kashkari that rising yields and a falling dollar show investors moving away from the US.
• He says central banks are buying gold instead, and gold has hit a new high.
• He downplays tariff-driven inflation, arguing overall CPI depends on money supply and may fall to 2% or below.