Should You Be Nervous?

Aug 16, 2026

∙ Paid

Investors,

I must admit…

I’m nervous about what yields are doing.

For the past few months, I’ve reiterated the view that yields wouldn’t go much higher.

Thankfully, I quantified “much higher” to mean that the 10Y Treasury yield wouldn’t get back above 4.8% (shown in blue), but they keep inching up towards that level.

Objectively, this is “bullish” price structure for yields.

It’s an uptrend… no doubt about it.

But it’s an uptrend with two caveats.

1. Yields haven’t made higher highs since late 2023. If this was a strong uptrend, wouldn’t yields be steadily rising? Isn’t the fact that it’s been sideways for 3 years evidence of a range-bound yield environment? Yes and yes. So it isn’t a strong uptrend.

2. While yields have been range-bound and/or rising, stocks have continued to remain in uptrend, bucking the textbook relationship where yields and asset prices have an inverse relationship (all else being equal). Clearly, all else is not equal. Thankfully, I’ve been on the record since October 2024 that yields don’t matter anymore.

These aren’t just any caveats.

They are monstrous, market-defining caveats.

So can I really be nervous if the market itself continues to shrug it off?

Mind you, constant warnings have been issued about surging yields in Japan.

Yet Japanese stocks are in a full-fledged uptrend: