The Bond Market Is Flashing a Major Warning | Steve Hanke

Watch on YouTube ↗  |  August 06, 2026 at 20:00  |  44:19  |  Wealthion
Speakers
Steve Hanke — Professor of Applied Economics, Johns Hopkins University

Summary

Professor Steve Hanke warns that markets are dangerously complacent about rising bond yields, persistent inflation, the widening Iran conflict, and America's fiscal deficit. He explains that the bond vigilantes have returned, driving yields higher, and sees the stock market as a bubble at risk of popping. He also forecasts a potential oil price spike as global inventories run low. Hanke advises avoiding bonds and stocks while flagging oil as a potential upside trade.

  • Bond vigilantes are back, pushing 10-year Treasury yields significantly higher.
  • Persistent money supply growth above 6% keeps inflation elevated and rates rising.
  • The US-Iran war, Strait of Hormuz closure, and inventory drawdowns set up an oil price spike.
  • The US stock market is in a bubble, and higher interest rates historically pop bubbles.
  • A widening US fiscal deficit, war spending, and tariffs add to bond market pressure.
  • China's geopolitical standing is improving, but its economy remains sluggish due to slow money growth.
  • A US gold revaluation would be cosmetic and not solve the deficit problem.
  • A constitutional debt brake is proposed as the only durable fix for US fiscal challenges.
Ideas
Steve Hanke Professor of Applied Economics, Johns Hopkins University 1:12
Avoid bonds as yields rise further.
Bond yields have risen significantly and will keep going up due to persistent inflation (money supply growing above the 2% target range), Trump's tariffs, the US-Iran war, and a widening fiscal deficit. Higher yields mean lower bond prices, making bonds an unattractive investment. The bond vigilantes are back and the bond market will drive the repricing.
IEF HIGH
Steve Hanke Professor of Applied Economics, Johns Hopkins University 7:52
Oil price spike coming as inventories deplete.
Crude oil inventories, including the US Strategic Petroleum Reserve (lowest since 1983) and private stocks, have been heavily drawn down to cushion supply disruptions from the Strait of Hormuz and Red Sea closures. Once inventories run out, the market will shift from a deficit to a shortage, forcing a sharp price spike and demand destruction.
WTI HIGH
Steve Hanke Professor of Applied Economics, Johns Hopkins University 31:22
Stock market bubble set to pop.
The US stock market is in a bubble by any measure, and history shows that rising interest rates are usually the trigger that pops bubbles. With bond yields climbing and the bond vigilantes active, the stock market is highly vulnerable.
SPY HIGH
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This Wealthion video, published August 06, 2026, features Steve Hanke discussing IEF, WTI, SPY. 3 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Steve Hanke  · Tickers: IEF, WTI, SPY