Anthony Gutman works at Goldman Sachs. He told governments to cut spending. Bond yields are high. Cutting spending would lower fiscal deficits. This would tackle the yields.
Gutman figured this out by looking at numbers that go up when governments borrow too much money. Revolutionary stuff. Nobody at Goldman has ever thought about this before. They usually just sell the bonds and collect fees while the yields do whatever they want.
Here's what's f*cked. Gutman gets paid millions to tell elected officials to spend less money. The elected officials got elected by promising to spend more money. So now they have to choose between listening to a Goldman banker or keeping their jobs. Tough call.
Retail traders heard this news and immediately checked their portfolios. They own three Treasury ETFs they bought because a YouTuber said rates would go down. Rates went up instead. Now they're reading headlines about fiscal deficits like it's a new concept. It is not a new concept.
Governments will not cut spending. They never do. They'll keep borrowing until bond markets force them to stop or until inflation makes the debt worth less in real terms. This is how it always works. Gutman knows this. He's not stupid.
He's just doing his job. His job is to say obvious things in public so Goldman looks responsible. Then Goldman goes back to underwriting the debt that makes the problem worse. It's a perfect system. Everyone wins except the people who believed yields would stay low forever.
Those people are called bond investors. They're getting destroyed right now. But they still won't listen to Gutman because listening would require admitting they were wrong six months ago when they loaded up on duration.
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