La crisi inflazionistica giapponese potrebbe innescare il prossimo crollo obbligazionario globale

La crisi inflazionistica giapponese potrebbe innescare il prossimo crollo obbligazionario globale

Hey, welcome back to the Daniela Camboni Show here on ITM. Trading the US isn’t just playing with fire when it comes to its economy, it’s fanning the flames. Global forecasts expect the US to take an economic hit, but as we all know, that hasn’t happened yet. Here to talk about this and so much more, Peter Bookvar. He’s the editor of the book report and the chief investment officer for 1 BFG Wealth Partners. Peter, always good to have you back on the show. Welcome back. Thank you, D Danielle. It’s great to be here and that that is a not a new firm, but just a new name of an existing one. Thank you for that clarification. Obviously, I want to get your thoughts on what’s going on in the economy. But first, I know offline we were talking about that very awkward moment between Donald Trump and Jay Powell uh when he was touring uh the Fed facility and talking the renovations. I mean, just your your take on that moment and and and where these two go from here. It it was cringeworthy and and it made it worse when uh they started going back and forth about the the total cost. I mean, I I think we can all agree that the that that the cost regardless of what was included is is insane. Uh but in the other hand, you know, beating down the the the Federal Reserve governor is not going to get you what you want. So, I think it’s a lose-lose for both. I think Jay Powell can’t wait until May 2026, but that anybody who replaces him, uh, they’re in a tough spot, too, because if they cowtow to Trump, then they’re going to ruin their own reputation. So, this is a very difficult, uh, fragile situation here. But either way, whatever the Fed does on the short end, we know the long end of the yield curve is going to speak for itself. And I want to get to that, but just just a little bit more here. Why do you think Jay Powell won’t wouldn’t just say, you know what, I’ve had enough. I’m gonna I’m just gonna leave it now. I think he he’s had a long career there between governor and chair. And I think if he did say that and sort of threw in the towel, I think he would be he would be reducing the the standing of the Fed. He would basically be rolling over for the president. he would basically be admitting that they’re they’re a uh an arm of of of executive branch policy. And while the Fed is obviously a branch of the government essentially, um I I I think by giving in uh he would damage the reputation of that institution. And for his own personal uh pride and dignity, I don’t think he weren’t the given either. Now, this is not his first rodeo with Trump. Trump beat him up on the in uh the first administration. Trump was asking how come we don’t have negative interest rates because Europe don’t. That’s right. Even though negative interest rates was a really bad idea. He just, you know, Trump thought that, well, if they’re doing it, how come we’re not doing it? So, what’s interesting, Peter, is that despite all this volatility, I mean, the bond market is relatively calm. Yes, to an extent. I think the the long end of the yield curve, long end being tens out to 30s, uh, they haven’t broken out. So, that’s one good thing. On the other hand, they’re starting to sticking around with the 10-year around 44 and a half and the 30 or five. And I think part of that is uncertainty about how this this Fed situation is going to play out, but inflation that’s still remaining relatively sticky. Still trying to figure out the tariff influence, but also being uh kept elevated by what’s going on globally with long-term interest rates. Uh you have the 10-year JGB yield on the day we’re taping this. Uh so Friday’s close, the highest level since I think it’s 2011 with the 30-year and 40 year just below the highest level since 2008. Uh you also have increases in um German bulls, UK guilts, French oats. There is a there is a uh an aversion to taking on too much duration in sovereign bond land on the part of global investors. And that is to me a big deal. uh this elevated level of long-term interest rates because you know I mentioned uh buns and French oats this comes with the with the ECB that is sharply cut interest rates but long-term interest rates are going their own way and I think that that is uh very noteworthy and I I I implore people every morning when they wake up in the US is to see what what JGB yields did because how they perform from here is going to have a big influence on US treasuries and also I’ll tie this one step forward uh from here is that the Japanese election was also a big deal for GGB yields and also the trade deal with the US is a big deal for JGB yields because the Bank of Japan has basically been sitting on their hands essentially doing nothing in the face of now 3% inflation uh both at the national level and we just saw a Tokyo figure where the excludent energy print was 3.1%. while the BOJ has the overnight rate at half a percent. So now that we’ve gotten this trade deal and they have some visibility on its impact, they could now be further raising interest rates. Also, Ashiba, the prime minister of Japan, lost his support both on the upper house and after losing it on the lower house because the Japanese people are fed up with inflation. So you have the Bank of Japan that has spent decades trying to generate higher inflation. Now that they got it, the people are pissed off about higher inflation and the the prime minister just lost his support in parliament and now the BOJ is sitting there saying, “Uhoh, uh, inflation still not meeting our underlying target.” It’s a very bizarre situation in Japan, but I keep talking about Japan because what happens with JGP yields is going to have a direct impact on European yields and US Treasury yields. Interesting. Okay. So, definitely something to watch. just getting back uh to rates and the US tier. I mean eventually uh you know when rolls out next May let’s say you know Trump even though yes the Fed is independent but let’s say he gets those finally those rate cuts he wants Peter is that necessarily the solution and the right track to be on. So this week the average 30-year mortgage rate is about 680 685. One year ago today it was about 680 to 685. That’s the average 30-year mortgage rate, which we know is priced up to 10-year. And that’s with the Fed cutting 100 basis points. So, the assumption that this time around that more Fed rate cuts are going to be this salvation to the uh firsttime home buyer, I think is misplaced. But I think Trump is actually more looking at rate cuts to salvage the US budget rather than the Fed carrying forward with their mandate of price stability and maximum employment. He talks about rate cuts in the sense of it’s going to save them money in interest expense because we know interest expense is about a trillion dollars and he’s hoping that they can lower that via uh lower rates. Now that’s obviously not the congressional mandate of the Fed. They are not going to cut rates just because uh it’s the prudent thing to do for the finances of the US government. They would only do so if they were worried about the unemployment rate moving higher and they were comfortable with the pace of inflation. Uh let’s uh wrap with this Peter. I want to know if you’re uh if you’re liking what you’re seeing on the gold front here. So I do uh you know when we talk about a lot of people talk about the dollar in the context of other fiat currencies and obviously we’ve had a pretty weak dollar this year with the first half being the weakest since 1973. But on a multi-year basis, the dollar has fallen sharply against the value of gold. Uh it’s not necessarily the price of gold going down. That’s the price of the dollar and other currencies going down. Uh so I think the move is noteworthy and central banks have spoken with their wallets. This is going to be the third year in a row where central banks are going to buy more than thousand uh metric tons of gold. And uh I see no reason why that’s not going to continue. And as the world decides to denominate uh transactions particularly anything related with China in in non-dollar uh uses uh there’s going to be a lot of flow through into the price of gold uh rather than in US dollar assets like do like treasuries and um and stocks. you know, the for foreign ownership of US assets has exploded in value and and in terms of ownership over the last couple years. And I think that the tariff war that we started has pissed off a lot of foreign countries to to the point where that incremental money that they had that might have flowed into the US is going to flow into other markets. We’ve seen tremendous outperformance in international markets this year relative to the US and it’s also flowing into gold as well in addition to other hard assets. You you said something interesting there and I just want to pick up on that. You said you don’t see central banks, you know, stopping their gold purchases and that was a question I brought up to the gold panel I just came back from at the Rick Rule show in in Boca Raton. H how what is convincing you that central banks will continue to buy gold? Because they are further diversifying their reserve holdings and they want to own less dollars. The dollars are still going to be an important part of of that sort of pie. Uh but gold now on a value basis is now number two in that reserve pie. Uh it’s recently exceeded the euro and where is it going to come out of? Well, dollar is is sort of overallocated and I think gold is going to benefit from that. uh rather than selling the euro or the yen or the pound or the Swiss frank, excuse me, that are other components of that pie. Uh I do think that gold is going to continue to be a recipient of that. And again, it’s not just central banks waking up and saying, “Okay, we want to own more gold to have in our vaults as just as reserves.” But as I said earlier, you know, China is buying more oil from uh Russia and paying in Juan. They’re buying soybeans from Brazil, paying in Juan. uh India is buying more oil from Saudi Arabia and paying in rupia and these countries are now taking some of that and parking it in gold too. So it also is a reflection of just the change in complexion to a small extent right now but still a a change and an evolutionary change of how the world is denominating their trade. Peter Bookvar makes a lot of sense as always fantastic insights. I appreciate you joining us today. Thanks for having me. Always uh always good to chat with you. We’ll check uh back in with you in a few weeks and thank you all for watching. We’ll have more great content. Uh so be sure to stay tuned to the Dingle Cambon Show here on ITM Trading. We’ll see you soon. [Music]

“This is a very difficult, fragile situation,” says Peter Boockvar, editor of The Boock Report and CIO of OnePoint BFG, reacting to the tense exchange between Donald Trump and Fed Chair Jerome Powell last week. “Beating down the Federal Reserve Governor is not going to get you what you want.”

In today’s interview with Daniela Cambone, Boockvar warns of rising global yields and why investors should “watch JGB yields every morning,” pointing to Japan as a key driver of long-term U.S. interest rates. “There is an aversion to taking on too much duration in sovereign bond land… and that is a big deal.” On gold, Boockvar explains why he expects another year of massive gold buying: “They are further diversifying their reserve holdings and want to own less dollars… Gold is now number two in that reserve pie.”

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