Stocks and gold are falling as problems in the US bond market worsen

Interest rates in the US bond market are rising today to historically high levels, which is causing an abundance of red figures in the financial markets. The oil price is taking another leap, inflation expectations are rising further and investors are pricing in more interest rate hikes.

The dollar is rising and at the same time we see stocks, gold, silver and also Bitcoin (BTC) falling in value.

The interest rate on US ten-year debt has today risen to the highest level since July 2004 of 5.08 percent. And the thirty-year interest rate is even at its highest point since 2004.

This is due to the rise in the oil price – Brent oil has become more than 3 percent more expensive today – as a result of which inflation expectations are rising again. Investors simply want to be compensated for this and demand a higher interest rate.

Oil is rising again as hopes for a quick agreement between Iran and the US are dwindling. Tehran reiterated that Hormuz remains closed and that negotiations will not resume until Washington accepts Iran's seven conditions.

New figures on the US economy are also fuelling inflation concerns. Companies grew faster in September than in more than five years, according to a monthly survey of buyers.

But their costs are also rising sharply, mainly due to more expensive energy and transport. These costs can soon be passed on to consumers.

In addition, investors expect more interest rate hikes. Fed Governor Michael Barr said today that the US central bank (Fed) should likely raise interest rates further.

“In my baseline scenario, further policy adjustments are likely to be needed to ensure that inflation falls to target in a timely manner,” Barr said at a Chicago Fed conference. According to him, the risks to inflation have increased and those to the labour market have decreased.

Last week, the Fed raised interest rates by 0.25 percentage points to 3.75 to 4 percent, the first increase in more than three years. About that move, Barr said, “We were positioned wrong and we made an adjustment in the right direction.”

Despite various interventions by the Ministry of Finance, the financing costs for the government continue to rise. This also increases borrowing costs for consumers and companies, and it is also the benchmark against which all other assets have to compete.

In the short term, there seems to be only one way out and that is to end the war with Iran and global energy crisis. But beneath the engine head is the structural problem of reckless government spending. The market has been flooded with new bonds for years and tech companies are also fishing in the same pond for their AI data centers.

Let's take a look at the results in the markets:

• Gold fell by 1.37 percent today.
• Silver has lost 2.33 percent of its value.
• The S&P 500 is down 0.66 percent.
• The Nasdaq 100 has fallen by 0.93 percent.
• Bitcoin (BTC) is the big loser with a fall of 2.30 percent.