The bond market...should we be concerned?

[pwd72s]

https://www.zerohedge.com/markets/bond-market-about-break-washington

Tyler Durden's Photo
by Tyler Durden
Thursday, May 21, 2026 - 08:05 AM
Submitted by QTR's Fringe Finance

The bond market is beginning to force reality onto Washington, and it may ultimately force an end to the Iran war long before politicians or diplomats are willing to admit it.

For months, investors have focused on missiles, retaliation headlines, oil chokepoints, and the possibility of a broader regional escalation from the Iran War. During the geopolitical noise, I urged readers not to overlook stress in financial markets that was happening before the war even started, namely in places like private credit and subprime auto lending. I called these “real crises” hiding behind record highs while “investors” chase gamma squeezes higher in an ongoing distortion feedback loop that is making things look far better than they are under the surface.

And now, beneath all the geopolitical noise, a much more serious, harder to ignore crisis is unfolding. As Cypher says in The Matrix:

"Fasten your seat belt Dorothy, 'cause Kansas is going bye-bye."

(click link to continue reading)

Thoughts from the braintrust here???

[jyl]

I don't think the financial system is about to seize up or anything like that, but higher rates are a drag on the economy and accelerating inflation doesn't give the Fed any room to cut rates.

[Chocaholic]

Reads like fear mongering. Look at history. We’ve endured much worse and somehow markets in general have thrived. Stay the course. He suggests we’ve entered the war during a state of weakness. A suggestion that is easily debated and hints at a flavored argument IMHO.

[gregpark]

Be concerned... be very concerned

[flatbutt]

Everyone sell now...so I can buy

[zakthor]

Zero hedge is conspiracy hype clickbait.

But…

Everyone should always be afraid of the bond market. Its the ultimate no bs market.

[Shaun @ Tru6]

It’s just become a topic of interest on Bloomberg morning show. I missed something today but someone was concerned is all I caught. There is way too much money in AI with some circiular deals that there has to some kind of corrrection within a year or so. This really does feel like the dot com boom.

[Superman]

Originally Posted by jyl

....accelerating inflation doesn't give the Fed any room to cut rates.

I agree with you but that might happen anyway.

[sc_rufctr]

Originally Posted by flatbutt

Everyone sell now...so I can buy

This but not Crypto. That's a ticking bomb IMO.

[flatbutt]

Originally Posted by sc_rufctr

This but not Crypto. That's a ticking bomb IMO.

I wouldn't touch it with a ten foot pole.

[sc_rufctr]

"I'm not a financial advisor"

[Paul T]

Originally Posted by Superman

I agree with you but that might happen anyway.

I doubt it. There is no solid economic justification for doing so at this time…just replacing the Fed chair won’t magically make them conform to “someone’s” will. At least I hope not, otherwise we are truly fk’d.

[greglepore]

I think we're about to find out if the Fed lost it cojones with the leadership change, I hope not.

[Shaun @ Tru6]

I predict Mr. Warsh will be a little lonely for 6 months to a year.

[john70t]

Originally Posted by Shaun @ Tru6

There is way too much money in AI with some circiular deals that there has to some kind of corrrection within a year or so. This really does feel like the dot com boom.

If so, I hope it implodes before taking root and causing electricity prices to go tenfold and knocks out power grids.
Each one of those supposedly uses something like a million houses worth of electricity.

(and search results seem to be getting worse, not more precise)

[Paul T]

not to mention these data centers are creating a massive chip shortage. I looked into replacing my Mac the other day and the earliest I can get one is Sept!

[Shaun @ Tru6]

Data centers will also be sucking up tons of water too. They are orchestrating the greatest transfer of wealth in history.

[speeder]

I wonder what the inflection point will be? $50 for a loaf of bread? Completely worthless U.S. currency and the Pacific Ocean a warm swamp full of dead fish and mammals? The problem is an uneducated public and oligarchs controlling media/information sources. All of this is preventable but greed and stupidity are currently in the lead.

[Paul T]

Originally Posted by Shaun @ Tru6

It’s just become a topic of interest on Bloomberg morning show. I missed something today but someone was concerned is all I caught. There is way too much money in AI with some circiular deals that there has to some kind of corrrection within a year or so. This really does feel like the dot com boom.

I agree, when you look at the aggregate investments in the AI space, it is beyond enormous. It’s almost impossible for all of those dollars to see a positive return - there will be tons of people and institutions that will lose big, and a few that will make monstrous fortunes. And like the dot-com/internet in the beginning, I do think when the dust all settles, and fortunes are made and lost, the world will very much be divided much like the pre-internet/post-internet era is today. I think it will ultimately usher in a dramatic shift in how humanity thinks and works.

[wdfifteen]

Originally Posted by Paul T

I doubt it. There is no solid economic justification for doing so at this time…just replacing the Fed chair won’t magically make them conform to “someone’s” will. At least I hope not, otherwise we are truly fk’d.

There has been little solid economic justification for doing a lot of what's been going on for the past few months. We were in a fragile position, but poised to start making real headway on inflation. Then a war and leadership that is single-mindedly focusing on it, to the point of explicitly stating they don't care about the economy, just the war.