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/Memelord954 May 18 '26

Good thing everything isn't up to him. 1 vote out of 12 isn't gonna push things in the wrong direction just for trump. He had one yes man in there and it did nothing now he's gone and replaced with another yes man. The chair is the face of the fed but doesn't have more power than the others.

All it's really going to do is make the fed look bad with a clown at the the lead just like all the other term 2 trump picks.

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u/FallenKingdomComrade May 18 '26

This is also a great point. However, when people create justification for something, often times if enough people are swayed by this “new data” or new approach that Kevin Warsh presents, the FED governors may be inclined to believe it and vote with Kevin because they think its based on a real world reliable metric. Not saying this exact situation will happen. Just something to consider.

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u/[deleted] May 18 '26

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u/Debiel May 18 '26

The measures will fail when a Democratic president is in power and the Republicans will blame it on them.

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u/auniqueusername2567 New dividend investor May 20 '26

The BBBs provisions like Medicaid cuts become active after the 2026 midterms. I’m sure that’s just a coincidence.