Yesterday's US CPI data met expectations.Kinggamescandycrush, did not continue to deteriorate, there is a downward trend as scheduled. Some time ago, the tense expectations of raising interest rates turned sharply, the expectations of interest rate cuts rose sharply, and US bonds rose sharply. It went up 0% in one day yesterday.Kinggamescandycrush.78%, this increase is about to catch up with the stock! Once inflation is brought under control, interest rates may be cut soon. Us bonds have taken off ahead of time, and the big market for US bonds is starting. Bonds are different from stocks. Bonds are a definite number. If the interest rate is 4%, the interest rate will certainly give you 4%. If the interest rate is cut, the bonds will certainly rise. It is all certain. Us debt is now the inflection point of the historical opportunity. Some investors are going to ask their wives for money again. They are going to raise a total of $300000 to take advantage of this rare opportunity in more than 10 years. Why is US debt a historical opportunity? Because the U. S. debt fell to the super bottom. Us debt has plummeted by 20% since 2021. The last time it was so miserable was the era of great stagflation 40 years ago!
ETF with heavy holdings of US Treasuries for 10 years plummeted 20%, while ETF with heavy holdings of US Treasuries for more than 20 years fell by an astonishing 52%! Bonds are fixed assets, and treasury bonds are the top bonds, which are even more terrifying than the stock market. Why did US debt plummet? Main cause: extreme overvaluation + violent increase in interest rates against the US dollar. As the epidemic swept the world in 2020, Laomi cut the benchmark interest rate to zero while releasing water without a bottom line in order to avoid the Great Recession. Us bond interest rates immediately plunged, the most representative 10-year US debt, interest rates plummeted all the way to 0.5%! Bond interest rates are inversely proportional to bond prices. Us bond interest rates fall to the floor, and market prices rise again and again. In just two years, US debt has emerged from a super bull market. ETF with heavy holdings of 10 years of US debt soared by 22%, and ETF of ultra-long US bonds with heavy holdings of more than 20 years rose by 65%! But things will turn back at the extreme, bond yield = bond coupon + spread yield, US bond coupon is extremely low, and high yield is contributed entirely by the spread, which is equivalent to the crazy valuation of the stock market. For example, the price of 10-year US bond futures once exploded to 140, while the face value is around 100. It is obvious that US bonds are extremely overvalued. Unfortunately, Lao Mi 0 interest rate + crazy money + bottomless release of water led to a surge in inflation, which once hit the highest level since 1980. The Federal Reserve reversed 180 degrees and began to risk its life to raise interest rates, and US debt interest rates skyrocketed all the way. Us debt has just experienced a big bull market, followed by historical interest rate hikes, a direct high crash, falling out of the most terrifying bear market in 40 years, the longer the bond duration, the higher the risk, the more severe the fall.
However, after the historical collapse of US debt, it is an excellent opportunity to start, because: 4% + ultra-high debt interest rate + the bottom of the big bear market + interest rate cut is imminent, US debt investment opportunities are extremely rare, ultra-high debt yields, global funds are crazy to buy risky assets, the stock market ushered in a sky-high liquidity, all soared, and then the US dollar risked its life to raise interest rates, and US debt interest rates soared all the way to 5%, 10 times the lowest point! The value of investment has soared! Us bond interest rates are now in the highest yield range since 2006, which is well worth starting with. Us debt is a globally recognized risk-free asset, with a high yield of 4% +. If you miss it, you don't know how old it will be next time. The US debt bubble has been squeezed out, and after more than two years of collapse, the valuation of US debt has completed its return. For example, 10-year US debt futures have killed 25% at their highs. All the gains in the last bull market have fallen, not to mention that they have fallen sharply through the historical bottom, and the bubble in the last bull market has been completely squeezed out. Interest rate increases are basically over and interest rate cuts are about to begin. Since March 2022, the Federal Reserve has raised interest rates for a total of 11 times, with a cumulative increase of 525 basis points. The last time interest rates were raised was in July 2023. In the current ultra-high interest rate environment, the Federal Reserve stopped raising interest rates four times, and now inflation has been falling. Once inflation falls to the Fed's target, it will begin to cut interest rates. The current cycle of raising interest rates for the US dollar has come to an end. Once interest rates are cut, US Treasuries are expected to return to the bull market. During the interest rate cut cycle, US Treasuries are one of the most certain assets.
