Bond Vigilantes vs. Fed: Market Volatility Looms Large

Treasury Secretary Bessent is engaged in a showdown with the bond vigilantes, and neither side appears willing to back down. The underlying market trends suggest that volatility may be on the horizon.

The trajectory of the 10-year Treasury yield has been steady, with a target price of 5% looming large. Market forces often get what they want in these situations.

Interestingly, bond yields and gold prices have risen together recently, outside of the brief period of weakness in gold seen over the past few days. With the likelihood of a Fed rate hike this week increasing to nearly 100%, gold has taken another hit yesterday.