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U.S. bond markets have seen substantial outflows, with $1.2 billion exiting TLT and $623 million from HYG. Michael A. Gayed highlights ongoing concerns over rising inflation risks and geopolitical tensions as contributing factors.
The yield on the 10-year U.S. Treasury stands at 4.38%. Gayed questions who will step in to buy bonds amid these challenging conditions and ongoing war, while also referencing related ETFs BND and LQD.
Gayed previously estimated that only 8-12% of the total yen carry trade has unwound, with a $4 trillion structural layer remaining largely intact, according to earlier commentary. He has also cited mounting risks for small-cap stocks after the Russell 2000 index dropped over 4% in a week. These observations add context to current concerns over shifting flows in bond markets.