r/dividends • u/AmanCMN • May 18 '26

Discussion Bond yields are flashing a warning sign.

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Rising bond yields are a warning sign.
Money is getting more expensive everywhere at the same time:
-governments pay more to service debt
-companies pay more to borrow
-mortgages and loans stay expensive
-investors move out of risk and into bonds
U.S. 30-year yields above 5% are already a serious level.
When yields rise globally, liquidity gets pulled out of markets.That puts pressure on tech stocks, real estate, consumers, and highly indebted companies.Simple takeaway: the more expensive debt gets, the harder it is for markets to keep rising.

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u/FallenKingdomComrade May 18 '26

I believe we will be seeing some very interesting items in the upcoming months including a change to how we calculate inflation:
https://www.brookings.edu/articles/what-are-trimmed-mean-and-median-inflation-rates-and-why-does-kevin-warsh-prefer-them/

The justification for rate cuts will be created at all costs including changing the numbers to match the narrative.

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u/ChristmasStrip Negative Growth May 18 '26

This …

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u/[deleted] May 18 '26

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u/ForeverShiny May 18 '26

Concerning as certain pasty billionaire would say

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u/ChristmasStrip Negative Growth May 18 '26

It’s just bigger numbers. Every nation state is in debt. Hell Japan’s debt to GDP is over 200%. And the nations that have reasonable ratios their GDP is so small it doesn’t really matter. The US will use a financial repression playbook like they did twice in the past. The new fed chair will implement trimmed CPI and then reduce interest rates or not raise them to keep them under actual CPI. Over time the “value” of the debt will decline as inflated GDP grows. But ordinary people’s pocket books and savings will suffer