Citadel CEO: Surge in Japanese bond yields rings alarm for the United States

BlockBeats News, January 23 — Multi-strategy hedge fund founder and CEO of Citadel, Kenneth Griffin, issued a warning at Davos, stating that the recent record high in daily bond yields is a “clear warning” for the United States. Currently, U.S. bond yields are approaching the dangerous threshold of 5%. A 5% yield not only means that holding U.S. bonds can now rival stock market returns but also signifies a fundamental shift in risk logic. Typically, bonds are stable, low-risk ballast in a portfolio. However, when bond yields soar to levels comparable to stocks, investors seeking stability will face excessive risks.

Griffin pointed out, “Once the market believes that the United States no longer has perfect creditworthiness, U.S. bonds will be viewed as risky assets, leading to a simultaneous decline in stocks and bonds. The result is that the bond market demands higher yields, which in turn pushes up mortgage rates, ultimately forcing us to pay a higher price to finance the deficit.” While the U.S. has not yet reached the point of “playing with fire,” the window for policymakers is closing. (Jin10)