Bond Market Delivers Warning: Cut it Out

November 10, 2023

by Karl Denninger Market-Ticker.org

Stocks seemed to be having a pretty good day yesterday……. and then the bond refinancing auction went off.

Well, technically I guess it did, but it was extremely weak, with the “Primary Dealers” left holding the bag (but with a nice long tail for compensation) and a horrid bid-to-cover.

The reaction was immediate: Stocks rolled over immediately from what had been a pretty decent day, and bond yields – as expected – spiked.

Congress is almost-certainly ignoring this message as they have for the entire last year, but they better start paying attention because the Bond Market is in fact in charge — not The Fed — when it comes to checks and balances on deficit spending.