The 10-year Treasury yield moved 3 basis points. Three. That's 0.03 percent for anyone who failed fourth grade math. The financial media wrote headlines about it anyway.
Retail traders are now refreshing their portfolios while waiting for inflation data they won't understand when it arrives. They'll read the CPI number. They'll check what CNBC says it means. Then they'll do whatever Jim Cramer tells them not to do, which is somehow still the wrong move.
The real story here is U.S.-Iran negotiations, which traders are apparently weighing. Weighing how, exactly? Did Kevin from Robinhood pull up a geopolitical risk model between his Doordash orders? Did he calculate the probability-adjusted impact of diplomatic outcomes on forward rate expectations? No. He saw a headline. He felt something. He clicked a button.
The yield rose to 4.483 percent. Not 4.5 percent, which would be a round number that might actually matter to someone. Not 4.4 percent, which would signal an actual reversal. It landed at 4.483 percent, a number so meaningless that even the algos ignored it.
Meanwhile Iran and the United States are negotiating something, which affects Treasury yields through a chain of causation so convoluted that nobody writing about it can actually explain it. Oil prices maybe. Risk appetite perhaps. Geopolitical uncertainty presumably. It's astrology for people who own Bloomberg terminals.
The inflation data comes out tomorrow. It will be a number. That number will be higher or lower than expectations by some amount that was already priced in two weeks ago. Traders will react anyway. Yields will move another 3 basis points. Another headline will get written. The cycle continues because nobody involved has anything better to do.
If you're trading bonds based on 3 basis point moves and Iranian diplomacy updates, you're not investing—you're just gambling with extra steps and worse odds.
Photo by Martin Sanchez on Unsplash
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