šØ 2026 Is Just Days Away ā and the Outlook Is Darker Than Most Expect
Something has shifted. The data is starting to align with whatās ahead.
First, the bond market isnāt nearly as calm as it appears.
The MOVE Indexāoften called the bond marketās VIXāhas eased recently, but that doesnāt signal safety. Itās a pause, not an end to volatility. The long end of the U.S. Treasury curve remains a major stress point going into the new year.
Second, foreign demand for U.S. Treasuries is weakening.
China continues to cut exposure, and while Japan remains a significant holder, its flows are now far more reactive to currency moves and policy changes. In the past, reduced foreign participation wasnāt fatalāissuance still cleared. Today, thereās far less room for error.
Third, Japan is no longer a side story.
Yen weakness is forcing policy responses, and every adjustment ripples through global carry trades and sovereign bond markets. When carry trades unwind, the stress doesnāt stay localāit spreads. And U.S. Treasuries are often the next pressure point.
Put it all together and the message is clear:
ā Real yields remain high
ā Term premium isnāt collapsing
ā Liquidity remains tight
ā Sovereign risk is being repriced
Yes, equities can keep grinding higher. Gold can hit new highs. Commodities can rally. None of that contradicts whatās happening beneath the surface.
By the time GDP data or recession headlines confirm the problem, the market will already have repriced.
2026 isnāt just another slowdown risk year.
Itās increasingly looking like a sovereign funding stress eventāone that could force central banks back into markets, whether they want to or not.
The timeline still makes sense. The pressure is building in the usual place.
Watch bonds first. Everything else follows.
And for the recordāI publicly called the last two major market tops. When I fully exit the market, Iāll share that too.
If youāre not following yet, youāll wish you had.
