Who is on each side · Part 07

Why did the long end climb after the hike: growth, debt, or a missing buyer?

21 investors who disagree about The Fed Hiked. The Long End Still Climbed.. Each voice is attributed and paraphrased, dated where the date is known, with a link where one exists.

The DeepStack callSkeptical

The bond market is pricing the AI bill, not a recession. The Fed cannot hike its way to a lower 10-year.

Supply sets the long end · Conviction High (4/5)

Read the full call

6 voices

Growth: yields are catching up

  1. Michael Howell

    The convenience yield of Treasuries measured against similar-duration AAA domestic bonds appears stronger rather than weaker, and conventional term premia have been broadly stable over the past year, so these indicators do not support the argument…

    Source

  2. Michael Howell

    Suppressing the long end of the yield curve is like holding a beachball underwater: it may work temporarily but the outcome is unstable, because holding long yields down flattens the term structure via arbitrage and shifts pressure to the front…

    Source

  3. Matthew C. Klein

    A 10-year Treasury note yielding less than 5% in conditions of supply tightening and rising nominal income growth represents the opposite of a disorderly market.

    Source

  4. Matthew C. Klein

    Current long-term Treasury yields are still low relative to reasonable expectations of inflation and growth, and are only obviously too high if inflation and growth are both set to slow sharply from current levels.

    Source

  5. Kris

    Interest rate hikes are not currently a problem for the economy or investing, because if the economy and company profits grow faster than the interest rate, value is created, and the estimated Q3 GDP growth of 5.1% plus inflation gives nominal…

    Source

  6. Kris

    The main reason for higher inflation is probably the more expensive oil, and a higher interest rate will not cure that; the Fed just wants to ensure inflation doesn't get out of hand.

    Source

9 voices

Debt: 99% of GDP, up from 35%

  1. TSCS

    On 16 September the US 10-year inflation-protected bond paid 2.68% over inflation, a level last seen on 26 November 2008, which led the creator to assume something was breaking; after a week of looking he says he could not find a crisis.

    Source

  2. TSCS

    Auction and volatility evidence does not look like a crisis: the 10 September 30-year drew 2.61 times bids with dealers taking 2.2%, the lowest dealer share in the 14 years of records the creator could pull against a next-lowest of 5.9%, and the…

    Source

  3. Vitaliy Katsenelson

    Bond investors are rejecting the government-set price for Treasuries because of large, unaddressed budget deficits that may grow rather than shrink over the next 10 years, and because budget deficits imply inflation; the creator says they…

    Source

  4. Vitaliy Katsenelson

    The US Treasury responded by at least doubling its buyback operations for 10- to 30-year maturities to lower yields, financing the purchases by issuing short-term Treasuries; yields fell for a day and then rose again.

    Source

  5. Steve Eisman

    Bessent's announced program to buy $4 billion, later raised to $6 billion, in long term Treasuries worked for one day before rates marched higher, so he needs a much bigger bazooka or an alternative buyer.

    Source

  6. Steve Eisman

    Scott Bessent is in an impossible position because federal debt sits around forty trillion dollars, and no Treasury Secretary has the firepower to push rates down against that kind of weight; intervention only works when fundamentals are already…

    Source

  7. George Noble

    No secretary talks down $40T of debt.

  8. Stephen Clapham

    The creator states they would maintain a near-zero weight in US Treasuries, other than those trading at a near-50% discount to nominal value which they see as an asymmetric bet, a position they say they have covered in recent weeks.

    Source

  9. Stephen Clapham

    The US 10 year yield has risen 24bps since Cembalest's quarterly was published and is now close to its 5 year high, following an earlier period in which it had risen only 10bps since Trump's initial 2025 tariff announcement while yields elsewhere…

6 voices

A missing buyer

  1. Michael W. Green

    Long yields have hit multi-decade extremes across the United States, Japan, Germany, Britain, and Australia despite different deficits, inflation histories, and central banks, which challenges a purely American fiscal explanation and points toward…

    Source

  2. Michael W. Green

    The price investors demand to warehouse duration has risen because the marginal buyer changed: the old buyer was largely unlevered, liability-matching, and indifferent to financing conditions, while the new buyer is increasingly levered, financed…

    Source

  3. Mia Silverio

    Canada's public pension funds are the third-largest pool of retirement savings in the world, and Canadian institutional managers are cooling on US investments: this past July Canadians sold $22 billion in US stocks, the biggest monthly sell-off…

    Source

  4. Mia Silverio

    The creator argues that persistent inflation concerns have pushed the U.S. 10-year Treasury yield near the closely watched 5% level for only the second time since the 2007-2008 financial crisis, and notes long-term Treasurys have returned -2%…

  5. TSCS

    The creator argues the front end cannot cap the long end: a hike is only about 4/10 of a percent of receipts and mostly lands as income with people who spend it, Treasury buybacks manage volatility rather than level, and the buyers who used to…

    Source

  6. TSCS

    Kevin Warsh is a pretend hawk rather than a constrained one, meaning he talks tough on inflation while avoiding costly action, and this position can be falsified by a rate hike on 16 September.

    Source

2 voices

Voices that cross sides

  1. TSCS

    The Federal Reserve faces a trap: if it hikes rates it loses control of the long end because it feeds an annual interest bill approaching $1 trillion, but if it cuts despite 3.4% inflation it also loses the long end, creating a frustrating setup…

    Source

  2. TSCS

    The creator's forward view is that oil and long yields keep rising until stocks fall, because the S&P is the only release valve left: the bond-market valve that worked in April 2025 is the one the buybacks are designed to keep shut.

    Source

Notes

Not a disagreement.

Where two voices only seem to differ, or where the thread runs back to an earlier Part.

Where they cross

Who answers whom.

The specific points where one voice meets another: the same evidence read two ways, or the same mechanism with a different sign.

What would settle it

The dated tests.

The same tests the story set, on the Docket; results land on the Results page.

  1. The Fed meets; another hike would support Klein’s inflation reading, while no move would strengthen Paulson’s case that September was a mistake.

    Part 07: The Fed Hiked. The Long End Still Climbed. Pending

  2. Mid-October

    Treasury publishes August foreign holdings; renewed Japanese buying despite poor hedged returns would undercut the missing-buyer thesis behind the long-end selloff.

    Part 07: The Fed Hiked. The Long End Still Climbed. Pending

  3. 10-year at 5.5%

    Howell expects a major bond opportunity; failure to turn would keep the growth brake unproven.

    Part 07: The Fed Hiked. The Long End Still Climbed. Pending

  4. 2028 refinancing wave

    Leveraged-loan and corporate maturities arrive; stress would show today’s rates are reaching AI’s borrowers.

    Part 07: The Fed Hiked. The Long End Still Climbed. Pending

Analysis and opinion, not investment advice. Voices are paraphrased from public writing and attributed by name; DeepStack shows no score, ranking or accuracy for any person.