
Jon Doyle
411 posts














If you can’t wrap your head around 10Y yield at 4.57% while the market is near highs, please keep reading to understand the credit cycle. 10Y at 4.575%. $SPX near all-time highs. Inflation expectations creeping up. Supposed to be impossible, it’s not. Yields are rising on growth, not fiscal panic. Real yields barely positive, breakevens stable at 2.3-2.5%, nominal GDP repricing higher. That’s reflation, not stagflation. CREDIT. HY sub-300bps. IG sub-100bps. Tariff stress test came and went and spreads went mostly unchanged. Corporate cash flows are outrunning the rate burden, the only thing that actually matters for whether higher yields kill the expansion. Inflation expectations up with tight credit = the market saying nominal growth is hot enough to absorb sticky inflation without breaking balance sheets. That’s a melt-up regime in one sentence. Real-yield negative still forces capital down the risk curve. Pensions, insurers, sovereigns can’t hit return targets in cash or bonds. They’re structural buyers of equity and credit no matter where the 10Y prints. Higher yields with no Fed cuts priced and equities at ATHs = the bond market endorsing soft-landing-to-no-landing. The regime needs the Fed not easing into a weak tape. The kill signal isn’t a hot CPI or a 5% 10Y. It’s HY spreads breaking 400bp while breakevens stay above 2.5%. Corporates losing the race against their cost of capital. Until that shows up, higher yields are a feature of the expansion, not a threat to it. Watch credit, not the 10Y level. @Globalflows


















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