U.S. Bonds Are Trading Like an Emerging Market with Liz Thomas

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SPEAKER_2 (1:08)

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Guy Adami (1:33)

A very warm welcome to the Risk Reversal Podcast. Of course, the voice you hear is that of Guy Adami, that would be me, and the voice you're about to hear is that of Elizabeth Thomas. That would be her. Hello there, ET.

Liz Thomas (1:45)

Good morning. We're recording this in the morning on Friday. I'm doing well today.

Guy Adami (1:50)

Well, you're not doing particularly well, and I'll tell you why you're not doing well, because as we get into now week three of the football season, your Packers who squeaked out a victory against the Jets, by the way, I don't know how that happened, they succumbed at home, the home opener on a Thursday night at Lambeau Field to the Falcons of Atlanta, which does not make a lot of sense to me.

Liz Thomas (2:12)

Yeah, it's not going well. It's not a good start. But you know what happens to Wisconsin teams very often? Is that we come out of the gates hot, and then everything cools off, and it's disappointing about mid season. So maybe we're switching up the pattern this time. Let's come out of the gates at a low bar, and just blow everybody away later. But I'm also going to be really honest, I'm still a Packer fan, of course, because it's branded on me at birth in the hospital. However, I'm not done with baseball yet, so I'm focusing on baseball. We've got the Brewers hit 100 wins this week.

We're in triple digits. So that's where my energy is right now.

Guy Adami (2:50)

The Brewers of Milwaukee have been the best baseball team in the league the entire season, so kudos to them. As you know, Elizabeth, I've said this many times, I'm hoping for a Brewer Yankee World Series, which would harken back to the 1950s when they were the Milwaukee Braves, as you also probably know. But that's not what people want to hear. Maybe some people do, I'm not sure.

But as I mentioned, that is Elizabeth Thomas. We're coming off, and when I use the term historic, I'm not trying to be hyperbolic here, but some of the bond moves we saw this week, again, we're taping this on a Friday morning, were historic. I mean, this is the United States of America. This is a $30 trillion economy, the largest economy in the history of mankind. And the moves in the bond market are those of developing nations, and you just don't see it all that often. So let's start there.

Liz Thomas (3:40)

Yes, let's. So first of all, I want to make it clear to all of our listeners, in case Dan has not made it clear enough yet, that you, Guy Adami, called this move for months. You have been talking about this happening for months. When most people disagreed, you kept saying, I think yields are going higher, doesn't matter what the treasury is doing, doesn't matter what the Fed is doing, they're going higher because the reasons that everybody thinks they're moving are not the real reasons. And you've been absolutely dead on. I started talking about buying the 10-year treasury above 480, and then I used it as my final trade once it hit 5

I did buy it in my personal account around 5, and now here I am. I might buy some more because it just kept going up. So some of the historic moves you're talking about. In the last two days, again, we're recording this Friday morning. In the last two days, treasury yields moved 20 basis points. We've got a five-year yield now above 5% for the first time in a very, very long time. The average yield across the treasury curve is now above 5% again, and that is a big move in something we haven't seen in years. The last time that we saw that was after the Fed hiked rates back in 2022, and inflation was above 9%.