Master trader Jeff Clark warns of a significant shift in bond yields, stating that this change marks a departure from a 40-year trend of declining rates. Long-term interest rates peaked in 1982 at 14% and subsequently fell to a low of 0.4% during the COVID-19 pandemic. Recently, the 30-year Treasury yield has surged, breaking above a four-decade resistance line, which could signal tighter economic conditions for consumers and tougher investment landscapes for Wall Street.
Since 2022, interest rates have increased by 60%, making borrowing costs approximately 11 times higher than five years ago. Consequently, Clark highlights that 2025 will see $9 trillion of U.S. national debt maturing, which will be refinanced at higher rates. The U.S. Treasury’s annual interest expense reached $1.117 trillion last year, expected to total $13.8 trillion over the next decade—almost double the previous twenty years’ total when adjusted for inflation. This fiscal situation poses substantial challenges for both the government and investors alike.
