Copper > 5 = Yields > 5

If you want to know where bond yields are going next, don’t start with the Fed. Start with copper.

That might sound strange — one’s a metal, the other’s a number on a screen. But they’re deeply connected. 

Copper is often called “the metal with a PhD in economics.” It doesn’t just sit in warehouses; it flows through the veins of the global economy. It’s in every wire, motor, factory, and grid. When demand for copper rises, it’s usually because factories are humming, builders are building, and energy projects are expanding. 

That’s what fuels growth — and growth brings inflation.

When inflation heats up, bond yields tend to rise.

Yields are simply the interest rate the market demands for lending money to the government. If investors think inflation will eat into their returns, they demand higher yields to compensate.

That’s why copper is such a good compass. When copper prices go up, it’s usually a sign that the economy’s running hotter, and yields move in the same direction.

The Relationship in the Charts

Look at the first chart: Copper vs. the 10-Year U.S. Treasury Yield.

Historically, they’ve moved together at some of the most important inflection points.  

When copper breaks out, yields follow. When copper breaks down, yields tend to fall.

But recently, something odd happened — copper dipped while bond yields held their range. People took that as a warning that inflation was cooling off and that maybe yields would soon follow copper lower.

That’s not how I saw it.

Even when copper fell, I kept pointing to one thing — it never broke trend. The chart held firm above $4.25, which has been a key support level. That meant the structure was still intact. 

Copper wasn’t collapsing; it was consolidating. Miners backed that up too. Copper miners stayed strong even when the metal softened, which told you the underlying demand was still there.

So while the crowd said, “Copper’s rolling over, inflation must be done,” I saw something different. A pullback, not a breakdown.

Why Fed Rate Cuts Might Fuel the Next Wave

Now, everyone’s watching the Fed. The consensus view is that rate cuts will ease pressure on the economy and bring inflation lower. But that’s not how this story usually goes.

When the Fed cuts rates, it makes borrowing cheaper. Businesses borrow more, consumers spend more, and the system gets flooded with new money again. And that new money tends to push prices — and inflation — higher.

Powell knows this. He’s said it repeatedly: cutting too early risks stoking inflation all over again.

And globally, central banks are already cutting aggressively — to levels you normally only see during bear markets or recessions. That’s the spark for the next inflation wave. Because easing into weakness doesn’t make inflation disappear — it just delays the pain and often sends commodity prices higher again.

Commodities Are Already Leading

You can already see it in the data.

Look around: GDX (gold miners), XME (metals and mining), SLX (steel), LIT (lithium), and URA (uranium) are all up between 2–6x this year compared to the S&P 500.

That’s not a coincidence. Those are the sectors that thrive when the market expects more inflation — when people believe hard assets will hold their value better than paper ones.

Copper is confirming that story.

If copper holds above $5, it’s not just signaling stronger industrial demand — it’s also confirming that bond yields are likely heading higher, not lower. And when long-term yields (like the 30-year) rise, that’s the market saying: we see more inflation ahead.

Oil Is Next

Now look at the second chart: Crude Oil vs. the 30-Year Yield.

For most of the past few years, these two have moved together too. But recently, they’ve diverged. Yields are rising while oil has been stuck.

That kind of gap doesn’t last forever. Historically, when you get this type of divergence, oil eventually catches up. If copper’s move is real — and yields continue to grind higher — then oil is likely the next commodity to join the rally.

Energy tends to move last in these cycles, but when it moves, it can move fast.

The Takeaway

The message across these charts is simple:

• Copper is confirming higher yields ahead.
• Rate cuts won’t end inflation — they’ll likely reaccelerate it.
• Commodity leadership is broadening.

This isn’t the end of the cycle — it’s the setup for the next leg.

So stay long commodity sectors. Watch copper like a hawk. And be ready — if copper sustains above $5, expect 30-year yields to push back above 5%, and energy to finally join the party.

Because when the world starts cutting rates again, they aren’t curing inflation — they’re feeding it.