After a decade of zero rates and QE post-2008, the financial system can no longer function without continuous stimulus. Attempts to tighten policy, as seen with the 2018 repo crisis, immediately cause breakdowns, forcing central banks to reverse course and indicating a permanent state of intervention.

Contrary to fears of a spike, a major rise in 10-year Treasury yields is unlikely. The current wide gap between long-term yields and the Fed's lower policy rate—a multi-year anomaly—makes these bonds increasingly attractive to buyers. This dynamic creates a natural ceiling on how high long-term rates can go.

Market stability is an evolutionary process where each crisis acts as a learning event. The 2008 crash taught policymakers how to respond with tools like credit facilities, enabling a much faster, more effective response to the COVID-19 shock. Crises are not just failures but necessary reps that improve systemic resilience.

The act of a small committee deciding the "correct" cost of money is analogous to communist planners setting prices for consumer goods. This approach assumes an impossible level of knowledge and control over a complex economy, a model that has consistently failed throughout history.

According to BlackRock's CIO Rick Reeder, the critical metric for the economy isn't the Fed Funds Rate, but a stable 10-year Treasury yield. This stability lowers volatility in the mortgage market, which is far more impactful for real-world borrowing, corporate funding, and international investor confidence.

'Fiscal dominance' occurs when government spending, not central bank policy, dictates the economy. In this state, the Federal Reserve's actions, like interest rate cuts, become largely ineffective for long-term stability. They can create short-term sentiment shifts but cannot overcome the overwhelming force of massive government deficit spending.

Before stress appears in repo markets or equity volatility, Bitcoin's price acts as a leading indicator. It is the "last functioning smoke alarm" for tightening global liquidity, making its price action a crucial, early signal for macro investors to monitor.

Lacking demand for long-term bonds, the Treasury issues massive short-term debt. This requires a larger cash balance (TGA) to avoid failed auctions, draining liquidity from the very markets needed to finance this debt, creating a self-reinforcing crisis dynamic.

Instead of ineffective grants to incumbents, the US should leverage its world-leading capital markets. By providing lightweight government backstops for private bank loans—absorbing partial default risk—it can de-risk private investment and unlock the massive capital needed for new factories without distorting market incentives.