Bonds Break Badly; Bad News For Investors

The global bond market is in disarray as bond prices keep falling after breaching two-decade lows. The 30-year U.S. Treasury bond yield exceeded 5.5% (5.532), and TLT (Treasury Long-Bond ETF) set another record low at 78.83. That's a decline of 14% since late October 2025.

It is not just Treasuries or the U.S. markets, either. New bond yield highs and new lows for bond prices were seen in Germany, Japan, and the United Kingdom.

I have called attention before to the more than 50% decline in bond prices since 2021. We are only a couple more bad days away from a 60% decline.

For the 30-year U.S. Treasury bond, the story is just plain horrible. Imagine having $1MM in U.S. Treasury bonds earning 1.4% six years ago. After collecting meager interest of $14,000 per year, your $1MM is now worth $430,000.

ARE STOCKS NEXT? 

Investors normally own bonds as part of a balanced portfolio. The reasoning is to balance against and offset the potential risk and volatility of stocks. The term "flight to safety" usually refers to the movement of capital out of stocks and into the perceived relative safety of bonds.

What happens when bonds appear to be riskier than stocks? Should investors sell their bonds and buy stocks?  Much of this depends on risk tolerance, need for income, and personal circumstances. And timing.

As far as stocks are concerned, though, I expect them to follow suit with bonds. And I expect bond yields (interest rates) to continue higher (i.e., bond prices continue to decline).

"Stocks are headed for a fall. A collapse in bond prices could trigger an all-asset collapse. Stock prices are bloated, and investors are unprepared for what is coming. (Bond Market Crack Widens; The Chasm Will Swallow Stocks)

CONCLUSION 

The circus is in town. The financial markets are just a side show for now. Soon the cages will open, and the animals will escape. Bears will do the most damage. It will not be pretty. (also see FOMC - From HogWarsh To WhiteWarsh)