10/6/26 - As refreshing as today's mid-day recovery may be, and as much as one might be tempted to conclude it was driven by a supportive ceiling in yields, we can't ignore that yields hit another new, long-term high before the recovery kicked in. Bottom line: it doesn't do much--if anything--to argue against the prevailing trend toward higher rates. Bottom line: while we can't know if more buyers will show up tomorrow, at the very lest, we know the mid-day rally was not sufficient evidence of a bullish reversal.

Ongoing contributions to high/rising rates in no particular order:

• War's implied impact on inflation and Treasury issuance
• Elevated Treasury issuance (fiscal imbalances)
• Elevated corporate bond issuance (competes for investor demand)
• Resilient stocks (competes for investor demand)
• Generally/gradually lower foreign demand (partly driven by tariffs and weaker trade relationships)
• Genuine strength/resilience in economic data
• A Federal Reserve that is willing to use the Fed Funds Rate to fight inflation (not the perfect tool, but it's the tool they have)