BND: U.S. Credit Downgrade Is Another Nail In The Coffin For Bonds

  • Moody's downgrade and surging interest costs signal a tipping point, with over half of US tax revenue potentially going to interest by 2028. BND faces long-term downside risk of 15-35% as inflation expectations rise and global demand for Treasuries wanes, evidenced by gold's outperformance. If the Fed loses independence, BND could decline faster as the likelihood of pro-inflation dovish policies grows.