Market Structure Notes — Helmholtz Watson TL;DR The Setup The U.S. 10-year yield is holding near ~4.4–4.5%, close to the top of its 2026 range, even as policy expectations remain stable. If term premium is rising, the next question is straightforward: What’s pushing it higher? The answer is increasingly clear: Supply. While markets remain focused on the next move from the Federal Reserve, something more structural is happening in the background: Treasury issuance is accelerating. Deficits remain elevated. Funding needs … Continue reading “Why Treasury Supply Is Driving Yields Higher — Not the Fed”
The Term Premium Is Back — And Markets Aren’t Ready
Market Structure Notes — Helmholtz Watson TL;DR The Setup If long-end yields are rising even as central banks pause, the obvious question is: What’s driving them? The answer is increasingly clear: Term premium is back. What Is Term Premium (And Why It Matters Now) Term premium is the compensation investors demand for holding long-duration bonds instead of rolling short-term debt. For years, that premium was compressed—by design. Quantitative easing: In some cases, term premium turned negative. That regime is ending. … Continue reading “The Term Premium Is Back — And Markets Aren’t Ready”
What You Need Know About Quantitative Tightening QT Bifurcations Explained
Most of us are familiar with QE but what is QT? When the Fed reduces its balance sheet it is known as quantitative tightening, the flipside of quantitative easing. The US Federal Reserve at its December FOMC put the world on notice that tighter financial conditions are ahead. What does it mean? The possible Bifurcations would make Mandelbrot wince. Firstly, the bond market has a lot more work as the task of financing governments gets more difficult without central banks … Continue reading “What You Need Know About Quantitative Tightening QT Bifurcations Explained”