RE: LeoThread 2025-09-03 16:08
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📉 Yields down, commodities up
US 2-year yields are hitting multi-year lows while commodities push toward all-time highs. That combination signals a macro trade-off:
🟡 Cut rates to keep servicing the debt load
🟡 Let inflation run hotter in the process
🟡 Commodities become the release valve, absorbing the pressure
This is what debt monetization looks like - the bond market weakens, real assets reprice stronger. The squeeze isn’t over.
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With the 2 year sinking and commodities pressing near highs, it screams policy cornered where easing helps the debt but stokes prices. If you had to pick one lane, are you favoring energy or broad commodity exposure for the next burst?
Cuts relieve debt rollover stress, but they also risk stoking already sticky prices.
If they cut and prices stay sticky, would you lean into energy as the main release valve, or spread bets across a broader commodity basket for balance?
If cuts hold and prices stick, I’d lean energy first since it’s the immediate pressure point, but diversify across metals/agri for balance. Energy sets the tone for input costs, while a basket gives cushion if oil/gas chop sideways.
#leothreads