💥 The AI Boom vs. The Bond Market's Biggest Warning Since 2007

EXPLAINED: The 1970s Are Back. The Bond Market Just Sent a Warning. 6% Inflation. Quantum Computing.

In 1979, Paul Volcker became Fed Chair with a simple mandate. Kill inflation. The problem? Inflation was 11%. The president wanted lower rates. And the public hated him. Volcker raised rates to 20% anyway. The economy went into back-to-back recessions. And he is now remembered as a hero.

Kevin Warsh was sworn in as Fed Chair last week. His inflation problem is smaller (3.8% and climbing). His political pressure is larger. And his bond market is already at 5.19% on the 30-year.

That’s a number most investors never look at. The yield on the 30-year U.S. Treasury bond. Last week, it hit 5.19%. The highest since July 2007.

I want you to think about what July 2007 was. It was 12 months before Lehman Brothers collapsed and took the global economy with it. The bond market knew something was wrong long before equity markets did. It always does. Bonds are the financial system’s smoke detector. And right now, that detector is going off.

I’ve been flagging this for weeks in this newsletter (if you’v…