Citadel CEO: Japan Bond Yields Surge as U.S. Sounds Alarm
BlockBeats News, January 23rd, Kenneth Griffin, founder and CEO of the multi-strategy hedge fund Citadel, issued a warning at Davos, stating that the recent record high in Japanese government bond yields is a "clear warning" for the United States. Currently, the U.S. bond yield is approaching the dangerous threshold of 5%. A 5% yield not only means that holding U.S. bonds has been rewarding enough to rival the stock market, but also signifies a fundamental shift in risk logic. Typically, bonds are a stable, low-risk anchor in a portfolio. However, when bond yields soar to a level equivalent to stocks, risk-averse investors seeking stability will face excessive risk.
Griffin pointed out that "Once the market no longer believes that the United States has impeccable creditworthiness, U.S. bonds will be viewed as risky assets, leading to a simultaneous decline in stocks and bonds. The result is that the bond market demands a higher yield, thereby raising mortgage rates, ultimately causing us to pay a higher price for deficit financing. Although the United States is not yet at the stage of 'playing with fire,' the window of opportunity left for policymakers is closing." (Jinse)
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