As the 10 Year US Treasury yield explodes higher, pay close attention to what new Fed Chair Warsh and other officials say in the coming days and weeks.
Why?
1. The 10 Year is the benchmark for just about all consumer borrowing rates in the US, including credit cards, auto loans, and mortgages.
2. The Fed controls the overnight rate by voting on the Fed Funds Target. But the 10 Year is set by the bond market itself. Buyers and sellers voting on inflation, credit risk, and Treasury supply in real time.
3. To keep consumer rates from following the 10 Year higher, the Fed has one tool left in the kit. Print money and buy the bonds themselves to force yields lower. Yield Curve Control.
And that is what drives excess money supply and the next leg of asset inflation.
Their words, and any fancy new acronyms, will be your first clue.
Feels like most people that post about US real estate have no fucking idea what is actually happening.
Either it’s pure engagement bait or some of these people are actually just delusional.
The fed prints money, not houses. The market isn’t going to “crash”.