The Illusion of Control: What Global Bond Yields Are Really Saying
September 4, 2025
Global 30-Year Yields: One Chart, One Message...
“You have power over your mind — not outside events. Realize this, and you will find strength.” — Marcus Aurelius, Meditations
For four decades, investors lived in a world where central banks appeared omnipotent. The narrative was neat: if growth slowed, they cut rates. If inflation ran hot, they hiked. Bonds rallied, stocks wobbled, and then recovered. It was a tidy story, repeated so often it became gospel.
But markets are never that simple. And the chart of global 30-year yields makes this point unmistakably: central banks can steer the short end of the curve, but the long end listens to deeper, structural forces.
Breaking Down the Chart
United States (black): At ~4.9%, U.S. 30-year yields have broken the secular downtrend that lasted from 1982–2020. The “safe haven” bid that investors counted on for generations is gone.
United Kingdom (red): Near 5.6%, the UK is the poster child for fiscal stress. Heavy debt issuance and weak credibility amplify every global shift.
Canada (blue): Tracking closely with the U.S., now around 3.9%. This confirms it isn’t just a U.S. quirk.
Germany (brown): Once anchored near zero, now above 3.3%. Europe can’t hide behind negative rates anymore.
Japan (green): Long considered the last dove, Japan’s 30-year has surged to 3.3% — its highest in decades.
The Illusion of Control
The Fed can cut overnight rates. The BOJ can peg short yields. But the long bond has its own voice. It reflects not policy statements but structural truths: inflation expectations, debt supply, and global flows.
When Powell cuts rates, the short end bends. The long end often rises. Why? Because easing into large deficits weakens debt credibility, stokes inflation, and forces investors to demand more compensation for holding long-term paper.
This is precisely the “illusion of control” Marcus Aurelius warned against. We may act, but we cannot dictate outcomes. The Fed may cut, but the long bond doesn’t have to obey.
The End of a Story
From 1982 to 2020, yields fell in stair-step fashion. It was the greatest bond bull market in history. Bonds provided ballast, the perfect hedge against equity volatility.
But that story ended in 2020. Since then, the long bond has consolidated near multi-decade highs. Investors know this, but like Orwell’s doublethink, they cling to the belief that bonds “must” rally again.
The Stoic answer is to see reality clearly — without wishing it were otherwise.
A Global Confirmation
What makes this chart so powerful is its global sweep. Yields are rising in the U.S., the U.K., Canada, Germany, and even Japan.
This isn’t about Powell, or Bailey, or Lagarde. It isn’t about one central bank meeting. It’s structural, it’s global, and it’s tied to deficits, debt supply, and commodity cycles.
Closing Thought
“Observe constantly that all things take place by change, and accustom yourself to consider that the nature of the Universe loves nothing so much as to change the things which are.” — Marcus Aurelius
The bond market is telling us the same. The old cycle is dead. The long bond has broken its downtrend. Yields are rising together across the globe.
Wisdom begins when we stop clinging to illusions. The charts tell us the same. Kenny’s FREE Schmooze is tonight @ 8pm ET.
