Originally published at: https://peakprosperity.com/daily-digest/bond-market-sell-off-recessionary-indicators-flashing/
Economy
The bond market experienced a significant sell-off, with 30-year yields surging by 56 basis points in just three days, indicating potential distress in the basis trade. Some market analysts suggest that this could be a temporary adjustment rather than a systemic failure.
Adding to recessionary concerns, there has been a notable increase in emergency 401(k) withdrawals, with rates 15% to 20% above historical norms. This trend, which began before Trump’s presidency, reflects the financial pressures many Americans face, exacerbated by inflation and economic policies from previous administrations. Some financial analysts suggest that this increase in withdrawals is part of a larger trend of financial distress among consumers, potentially intensified by recent policy impacts.
Additionally, oil prices have dropped to below $57 a barrel, the lowest since 2021, further corroborating broader economic pressures.
On tariffs, Trump has warned China of their “losing hand” in trade negotiations, asserting U.S. leverage due to its market size. Some economists argue that the trade war could still harm both economies, potentially disrupting global supply chains. Furthermore, he announced plans for major tariffs on pharmaceuticals, aiming to encourage the return of manufacturing to the U.S. by leveraging the country’s market power. Pharmaceutical companies are concerned about the potential increase in drug prices due to these tariffs, which could affect consumers.
Meanwhile, central banks are reportedly increasing their gold reserves, suggesting a strategic repositioning of gold from a hedge to a cornerstone in the evolving financial system. This move is seen by some as an effort to restore trust and resilience in the face of economic uncertainties.
Geopolitics
President Trump announced plans for a $1 trillion defense budget, the highest in history, despite ongoing efforts to reduce government waste. Critics argue that this could potentially increase the national debt without directly benefiting U.S. defense.
Across the pond, Ukraine’s former commander-in-chief has confirmed the existence of a secret command center in Wiesbaden, Germany, described as a strategic asset in the ongoing conflict with Russia. While some see this as a logistical advantage for Ukraine, others express concerns over the transparency and oversight of such operations on German soil.
In other news, Ryan Wesley Routh, accused of attempting to assassinate Donald Trump, allegedly sought military-grade weapons from Ukraine, indicating the geopolitical tensions influencing domestic security.
Energy
U.S. uranium production has reportedly reached a six-year high in 2024, driven by higher uranium prices. The production of uranium concentrate, essential for nuclear reactors, exceeded half a million pounds, marking a recovery from the decline observed since the 1980s. This increase is attributed to the operation of in-situ recovery facilities in Texas and Wyoming, and the resumption at White Mesa Mill in Utah. Concurrently, President Trump signed executive orders aimed at supporting the coal industry, citing job preservation and grid reliability. These actions include ending policies deemed discriminatory against coal, imposing a moratorium on policies that could threaten coal plants, promoting grid security, and investigating what are described as anti-coal policies by Democrat-run states. However, critics argue that these actions could lead to increased pollution and health risks, potentially reversing progress made in reducing emissions.
Environment
An oil spill near Edinburgh, North Dakota, occurred following a rupture in the Keystone pipeline, highlighting ongoing environmental concerns related to energy infrastructure. While the spill was contained relatively quickly, minimizing the spread, environmental groups have criticized the lack of stringent regulations on pipeline safety.
Sources
U.S. Uranium Production Surges to Six-Year High Amid Nuclear Power Push
“Companies in the United States produced more uranium concentrate in 2024 than in any year since 2018 after a sustained period of higher uranium prices spurred production,” the agency said in an April 2 statement.
Source | Submitted by BonnieB2A
Ukraine’s Secret Command Center: The Wiesbaden HQ Revealed
Our secret weapon.
Source | Submitted by rhollenb
Trump Assassin Suspect Sought RPG from Ukraine, DOJ Reveals
Send me an RPG or Stinger and I will see what we can do…[Trump] is not good for Ukraine.
Source | Submitted by BonnieB2A
The Gold Renaissance: Central Banks Quietly Reshape the Financial Landscape
Gold isn’t just a hedge. It’s becoming a cornerstone in what comes next.
Source | Submitted by Gamma Geek
Trump Signs Executive Orders to Revive Coal Industry, Citing Job Preservation and Grid Reliability
Directs all departments and agencies of the federal government to end all discriminatory policies against the coal industry
Source | Submitted by IronForge
Emergency 401(k) Withdrawals Surge Amid Economic Strain
These funds have become Americans’ rainy-day funds, used to prevent foreclosure and pay medical bills.
“Absolutely Spectacular Meltdown”: The Basis Trade Implosion Sparks Trillion-Dollar Liquidation Panic
Absolutely, spectacular meltdown into the end of the session which has many (myself included) continuing to question their sanity as the curve aggressively bear steepens and spreads, basis, etc. fall out of bed.
Source (Paywalled)
Trump and Hegseth Announce First-Ever $1 Trillion Defense Budget Amid Fiscal Concerns
Nobody’s seen anything like it. We have to build out military, and we’re very cost-conscious, but the military is something we have to build, and we have to be strong.
Keystone Pipeline Rupture Causes Oil Spill Near Edinburgh, North Dakota
Oil spill near Edinburgh, North Dakota after rupture of Keystone pipeline.
Disorderly Liquidation in Bond Market: 30-Year Yields Surge 56 Basis Points in Three Days
Something has broken tonight in the bond market. We are seeing a disorderly liquidation.
Oil Prices Plummet to Below $57 a Barrel, Lowest Since 2021
Oil falls below $57 a barrel, marking the lowest prices since 2021.
Treasury Secretary Bessent Warns China: “You’re Bluffing with a Losing Hand in Trade Poker”
Traditionally, if you look at the history of the trade negotiations, we are the deficit country. So what do we lose by the Chinese raising tariffs on us? We export one-fifth to them of what they export to us. So that is a losing hand for them.
President Trump Announces Imminent Major Tariffs on Pharmaceuticals
We’re gonna tariff our pharmaceuticals … we’re going to be announcing very shortly a major tariff on pharmaceuticals.
In addition to sources submitted by community members, the following were also used in the creation of this report: The Guardian, Reuters, Bloomberg, The Hill, Financial Times.