The David Lin Report · Monday, June 29, 2026
While acknowledging the US economy's strong momentum, Michael Howell expresses concern that yields above 5.5% could become problematic due to significant leverage within the financial system. He differentiates between economic health and financial system health, highlighting that leverage amplifies risks in fixed income markets.
“A lot of people used to draw a line at about 5.5% bond yield saying that the economy would would derail at those levels. I mean, that probably is not an unreasonable suggestion.”
“But I think the danger point for the fixed income for the financial markets comes earlier than that because there's a lot of leverage in the system.”
“And that's what we we've got to be conscious of. And those are the cracks that we've argued are appearing already.”