anybody got good insights on implications of current happenings in the bond market

onchain: IRL NFT Art with /bright-moments | off chain: baking or consuming sourdough

A few possibilities:

1) Capital flight from USD as trading partners diversify. The US exports dollars for goods. The receiving country recycles some of those dollars into holding US treasuries. If there is a move away from trade, these natural buyers of treasuries fall off.

2) Institutions selling to satisfy margin calls on equities and shore up balance sheet cash

3) China could be selling their UST holdings to buffer against tariffs. Some argue they are going to try to push longer end US rates higher on the upcoming US refi cliff. A lot of 4d/5d chess theorists argued Trump admin initially launched this trade war to force Fed to cut rates. This makes that play more difficult.

Two good explainers on the “basis trade”

I work at the posts office

terminally.online

You buy a spot treasury and short a futures contract on it and hold them both until the futures settle. When they settle they converge to the same price. So you’re guaranteed the difference, the “basis.” (As long as it doesn’t blow up)

In crypto terms it’s very similar to USDe: Ethena is basically a basis trade turned into a stablecoin.

Two good explainers on the “basis trade”

https://archive.is/JP09k
https://archive.is/Szzi5

4D chess was more like 1D chess and the direction is down only

Bonds are starting to look like a safer way to make money, so, people might pull their cash out of stocks and crypto for now