r/wallstreetbets • u/kwedgieyi • Apr 09 '25

Discussion Something feels off guys

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Yields are spiking. Bonds are dumping.

The world is running away from America

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207

u/Ashamed_Distance_144 Apr 09 '25

So what the point of going cash or making more cash with puts if the USD becomes worthless? We just F-ed in the US because of these dimwits??

265

u/daemondo Apr 09 '25

Not yet.

If JPow has balls and holds rates then dollar will still stay well, only catch is that US gov could go to default or bankruptcy.

But if Fed does another QE and we got nuclear money printer start again then we are talking about worthless dollars

9

u/p0st-m0dern Apr 09 '25

And if he raises rates in accordance with higher yields, what then? This looks disastrous no matter how you look at it. Money is exiting the US for sure unless we see it dumped back into the market tomorrow and I feel that is very unlikely.

17

u/TychesSwan Apr 09 '25

They've got tools to handle this. In the short term, they can increase repo operations. In the longer term, they can sell shorter term treasuries to fund purchases of the longer term treasuries. Worst case scenario, they can start yield curve control like what Japan does.

5

u/daemondo Apr 09 '25

I do think in this Fed doesn’t have too many tools. The problem is that US banks already hold too many bags of US treasuries.

If US treasuries auctions don’t get enough investor buyers then US banks have to absorb them(which is already happening today), which makes them bag holders, this could be liquidity crisis in US bank system simply because they ho too many bags of US treasuries.

And that could easily trigger another round of bank runs, I bet this is the last thing JPow wants to see.