The US long-term bonds have hit new lows, the yield curve has been inverted for two years now, and inflation remains uncertain, meaning interest rates may not ease at all. Yet, stock markets are reaching new highs.
We have a "grey rhino" in this market. A grey rhino is a large and visible animal that cannot be ignored. Try not to get too close to them because when they start charging, we can never outrun them.
In this market context, we face a big, obvious problem that investors completely ignore until it becomes a crisis. It's different from a "black swan," which is a rare and unpredictable event.
When we recognize that there are problems many do not understand, we have already won half the battle.
U.S. Treasury Bonds Futures & Options Ticker: ZB Minimum fluctuation: 1/32 of one point (0.03125) = $31.25
2-Year Yield Futures Ticker: 2YY Minimum fluctuation: 0.001 Index points (1/10th basis point per annum) = $1.00
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