Treasury yields went up. Jobs numbers came in weak. These two things happened at the same time. According to every breathless market commentator who's ever lived, this should be impossible.
Except it isn't impossible. It happened. Right there in front of everyone. The 10-year yield ticked higher while September payrolls disappointed. No law of physics was violated. No economic textbook spontaneously combusted. The market just did what it does every single day: whatever the f*ck it wants.
Retail traders spent Friday morning rage-scrolling through their broker apps, trying to reconcile the headline with their freshly minted understanding of macro fundamentals. Weak jobs mean rate cuts mean lower yields, right? That's what the YouTube guy with the whiteboard said. That's what made sense during the seventeen minutes they spent learning monetary policy last Tuesday.
Wrong. The market doesn't care about your whiteboard. It doesn't care about your macro thesis. It especially doesn't care that you finally understand the inverse relationship between bond prices and yields.
Here's what actually happened: some people bought bonds. Some people sold bonds. The net result was a small move in one direction. Then a financial journalist wrote a headline connecting that move to the nearest economic data release, because that's the job. Create narrative. Explain randomness. Pretend the drunk guy stumbling down the street is actually walking with purpose toward a specific destination.
The truth is simpler and more insulting. Treasury yields moved because Treasury yields move. They've been moving since Treasuries existed. They'll keep moving until the Republic collapses or the sun explodes, whichever comes first. Attaching a jobs report to that movement is like blaming your divorce on the weather.
But sure, keep reading the news. Keep drawing your little trend lines through the chaos. The bond market will be here when you're done, doing exactly what you didn't expect.
Photo by Marcus Reubenstein on Unsplash
Leave a Comment