Who is on each side · Part 07
Why did the long end climb after the hike: growth, debt, or a missing buyer?
10 voices who disagree about The Fed Hiked. The Long End Still Climbed.. Each voice is attributed and paraphrased, dated where the date is known, with a link where one exists.
The DeepStack callSkeptical
The bond market is pricing the AI bill, not a recession. The Fed cannot hike its way to a lower 10-year.
Our Call takes the side “A missing buyer”.
6 voices
Growth: yields are catching up
The current bond market cycle is behaving like a normal cycle, and a major buying opportunity for fixed income is approaching as yields near a peak.
The risk-return balance for bonds is improving: a further 50bp yield rise would still give bonds a positive annual return, while a subsequent 100bp yield fall would generate a more than 12% annual return.
Contrary to what many officials expected, inflation stopped decelerating in 2023, which is especially visible in underlying measures that exclude volatile and idiosyncratic components.
The 'supercore' version of the PCE price index was rising about 1 percentage point faster than in the years immediately preceding the pandemic even before the surprises of 2025-2026, and is now rising about 2 percentage points faster.
Interest rate hikes are not currently a problem for the economy or investing, because if the economy and company profits grow faster than the interest rate, value is created, and the estimated Q3 GDP growth of 5.1% plus inflation gives nominal…
The main reason for higher inflation is probably the more expensive oil, and a higher interest rate will not cure that; the Fed just wants to ensure inflation doesn't get out of hand.
9 voices
Debt: 99% of GDP, up from 35%
The Federal Reserve faces a trap: if it hikes rates it loses control of the long end because it feeds an annual interest bill approaching $1 trillion, but if it cuts despite 3.4% inflation it also loses the long end, creating a frustrating setup…
TSCS argues governments and central banks do not want long yields higher and will go a long way to stop it, which means that if they succeed real yields fall and today's 2.65% over inflation won't be on offer for long, and if the way they succeed…
Bond investors are rejecting the government-set price for Treasuries because of large, unaddressed budget deficits that may grow rather than shrink over the next 10 years, and because budget deficits imply inflation; Vitaliy Katsenelson says they…
In mid-August 2026 the 30-year Treasury yield reached its highest level in 19 years, above 5.3% (last seen in 2007), and the 10-year yield hit 4.75%; these are important because 30-year mortgage rates are set from them and about two-thirds of US…
Treasury Secretary Bessent's $4 billion to $6 billion effort to buy long Treasuries and push rates down failed, as rates went up anyway, and his speaking at a partisan political convention undermined his credibility with the bond market.
Ten-year Treasury yields have broken through 4.8% and then 4.9%, the highest level since November 2023, driven by the Iran war pushing oil prices above $100.
George Noble
No secretary talks down $40T of debt.
Stephen Clapham states they would maintain a near-zero weight in US Treasuries, other than those trading at a near-50% discount to nominal value which they see as an asymmetric bet, a position they say they have covered in recent weeks.
A rise in short rates would be a problem given the government funds around 85% of its financing needs (the flow) with short-term bills, though on a stock basis bonds of over 5 years duration are only about 30% of the total, still a fairly…
6 voices
A missing buyer
The structural buyer base for long-duration Treasury debt has been withdrawing in stages for years—the Japanese hedged bid was damaged by the 2022 rate shock, Russia and China ceased buying in summer 2022, corporate pensions largely finished their…
What markets are showing is not a shortage of safe assets but a shortage of buyers willing to own duration, with sovereigns and corporates both saying the same thing: the corporate safe-asset factory is becoming ordinary risky debt and the…
Mia Silverio argues that persistent inflation concerns have pushed the U.S. 10-year Treasury yield near the closely watched 5% level for only the second time since the 2007-2008 financial crisis, and notes long-term Treasurys have returned -2%…
Canada's public pension funds are the third-largest pool of retirement savings in the world, and Canadian institutional managers are cooling on US investments: this past July Canadians sold $22 billion in US stocks, the biggest monthly sell-off…
Oil explains the day-to-day wiggles in yields but not the trend, since Brent is cheaper today than at its spring peak while the 10-year is 70bp higher, even though since the war a $10 Brent move has come with about 5bp on the 10-year (roughly 3…
TSCS argues the front end cannot cap the long end: a hike is only about 4/10 of a percent of receipts and mostly lands as income with people who spend it, Treasury buybacks manage volatility rather than level, and the buyers who used to close the…
2 voices
Voices that cross sides
Kevin Warsh is a pretend hawk rather than a constrained one, meaning he talks tough on inflation while avoiding costly action, and this position can be falsified by a rate hike on 16 September.
TSCS's forward view is that oil and long yields keep rising until stocks fall, because the S&P is the only release valve left: the bond-market valve that worked in April 2025 is the one the buybacks are designed to keep shut.
Notes
Not a disagreement.
Where two voices only seem to differ, or where the thread runs back to an earlier Part.
Where the AI buildout sits in the price
Borrowers who choose: CleanSpark at 8.25% for a Meta data center; CoreWeave's convert coupon at 1.75% to 2.875%, upsized anyway. Borrowers who cannot: floating-rate loans reset on schedule. The valuations (Ren): 5% is the bar every long-duration growth stock must clear.
Where they cross
Who answers whom.
The specific points where one voice meets another: the same evidence read two ways, or the same mechanism with a different sign.
Michael Howell qualifies Michael W. Green, on the mechanism
TSCS refutes Steve Eisman, on the evidence
Vitaliy Katsenelson contradicts TSCS, on the mechanism
Michael W. Green contradicts Michael Howell, on the mechanism
Michael Howell contradicts TSCS, on premise
Michael Howell qualifies Michael W. Green, on the evidence
Stephen Clapham qualifies Michael Howell, on the mechanism
Vitaliy Katsenelson refutes Michael W. Green, on the mechanism
Michael Howell qualifies TSCS, on the evidence
Michael Howell contradicts Michael W. Green, on the mechanism
Michael W. Green contradicts Michael Howell, on the evidence
Michael Howell refutes Michael W. Green, on the mechanism
Michael Howell contradicts Michael W. Green, on the evidence
Matthew C. Klein qualifies Michael W. Green, on a condition
Michael Howell qualifies Matthew C. Klein, on the evidence
Michael W. Green qualifies Michael Howell, on the mechanism
Michael Howell refutes TSCS, on the mechanism
Michael Howell qualifies Michael W. Green, on a condition
Michael Howell qualifies Vitaliy Katsenelson, on the mechanism
Vitaliy Katsenelson qualifies TSCS, on premise
Vitaliy Katsenelson qualifies Stephen Clapham, on the mechanism
Vitaliy Katsenelson contradicts Michael Howell, on the evidence
Michael W. Green qualifies Michael Howell, on a condition
Michael Howell contradicts Mia Silverio, on the evidence
What would settle it
The dated tests.
The same tests the story set, on the Docket; results land on the Results page.
The Fed meets; another hike would support Klein’s inflation reading, while no move would strengthen Paulson’s case that September was a mistake.
- Mid-October
Treasury publishes August foreign holdings; renewed Japanese buying despite poor hedged returns would undercut the missing-buyer thesis behind the long-end selloff.
- 10-year at 5.5%
Howell expects a major bond opportunity; failure to turn would keep the growth brake unproven.
- 2028 refinancing wave
Leveraged-loan and corporate maturities arrive; stress would show today’s rates are reaching AI’s borrowers.
Analysis and opinion, not investment advice. Voices are paraphrased from public writing and attributed by name; DeepStack shows no score, ranking or accuracy for any person.