faucets and sewers

faucets and sewers

Doctor has two blood pressure. Systolic and diastolic.
Both are high blood pressure, and both are low blood pressure.
But if only one goes up and the other goes down,
That’s when the doctor’s eyes change.
This is because the opening itself is a diagnosis.

The U.S. yield curve is exactly that now.

SOFR, the interest rate at which banks borrow money overnight
I’m going down alone this year.
3.55% now, up from 3.75% in January.
After the Fed lowered interest rates three times last year, it is freezing this year, and the short-term money market is sinking to the bottom of the benchmark interest rate amid the inertia of the cut. Since the tap is turned on and not turned off, water continues to flow from the front.

The problem is the back.

2-year, 5-year, 10-year, 30-year. It’s all going up.
The 30-year mark hit 5.14%. It’s the highest since 2007.
Citigroup says 5.5% is the next gateway.
YEONJUN turns on the tap,
In other words, water is flowing back from the sewer.

There is a name for this phenomenon.
Bear steeping.

Short-term interest rates fall, but long-term interest rates rise faster.
This is what the mayor says.
“You can release the money right away. But 10 years later, 30 years later in the United States? I’ll get more expensive.”

Why do they want to be expensive?
The answer came in the second week of May.
The CPI hit a three-year high,
PPI jumped and import prices rose.
Tariffs have begun to seep into the water.
And there’s no sign that the deficit is going to decrease,
The issuance of government bonds should continue to increase.
There are a lot of people who want to borrow it
The requirements of the lender have become strict.

I see a patient like this in the doctor’s office.
Someone who is taking blood pressure medication and has a widening pulse pressure (systolic-dystolic difference). It’s not that the medication doesn’t work.
The medicine is doing its job. However, the blood vessels are hardening where the medicine cannot be touched.

The Fed is doing its job. SOFR is the proof.
However, the hardening is underway in areas where the Fed cannot touch, in the blood vessels of fiscal, inflation, and government bond supply.
No matter how hard the faucet is turned on, if the sewer pipe is blocked, the house will be submerged.