Most investors have long considered Treasury bonds a safe and reliable investment option. They are backed by the full faith and credit of the U.S. Government and are often used as a benchmark for other bonds. However, the dynamics of the treasury bond market and its interplay with the U.S. debt situation and inflation can sometimes lead to a vicious feedback loop, creating a precarious economic situation. In this article, we will delve deeper into the functioning of treasury bonds and explore the feedback loop between bonds, debt, and inflation in the context of the highest 10-year Treasury bond yield since 2007.
