Luke Gromen: Yield Curve Control is the Only Way to Stop a Global Bond Crisis

July 28, 2026

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5 min read

Luke Gromen, president of Forest for the Trees, argues that the global bond market is caught in an unsustainable spiral driven by a straightforward math problem: the U.S. and other Western governments have massive off-balance-sheet liabilities—entitlements for aging boomers and veterans' benefits from decades of war—that are now coming due. These obligations are consuming nearly all tax receipts, leaving governments with no good options. They cannot raise taxes without triggering a recession, they cannot cut benefits without political upheaval, and they cannot let yields rise too high without crashing their own financialized economies. The only way out, Gromen contends, is some form of yield curve control (YCC)—central banks printing money to cap long-term bond yields—even if policymakers refuse to call it that until a crisis forces their hand.

The Fiscal Trap Driving Yields Higher

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What you'll learn

1 (00:42) **Luke Gromen's Thesis: The Bond Selloff is a Supply-Demand Crisis** - Gromen argues the fundamental driver is not inflation but an unsustainable supply-demand imbalance.
2 (08:28) **Defense Stimulus Turns Global Creditors into Bond Sellers** - Major sovereigns are now competing to sell debt, destroying a key source of demand for US Treasuries.
3 (10:01) **Why High Real Yields Are a "Disaster" for the US Economy** - Gromen refutes the idea that high real yields can solve the debt problem.
4 (13:18) **The "Farcical" Fed: Warsh's Only Path is More QE** - Gromen predicts any Fed chair will be forced to abandon hawkish talk and expand the balance sheet.
5 (16:58) **The Bond Market is Ignoring a "Good" News (Ceasefire)** - The market's failure to rally on a drop in oil prices is a major red flag.
6 (17:47) **AI is the Next Bubble, Backstopped by the Government** - Gromen argues the AI buildout is a debt-financed, defense-justified stimulus that will require a federal bailout.
7 (26:56) **We Have "Crossed the Rubicon": No Stabilization Without Intervention** - The bond market cannot stabilize on its own; only a crash or central bank action will work.

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Guests on this episode

Luke Gromen

Show Notes

Learn more about the Fundrise Income Fund here: https://Fundrise.com/mm

Luke Gromen, founder of Forest for the Trees, sites down with Max Wiethe to dissect the escalating crisis in the global bond market. Gromen argues that off-balance sheet liabilities, such as baby boomer retirements and surging veterans' benefits, are colliding with massive defense spending to force a dangerous inflationary spiral. He unpacks how "defense stimmies" from nations like Japan and Germany are turning historical creditors into aggressive bond sellers, putting immense pressure on yields. Throughout the conversation, Gromen also issues a stark warning about the AI tech bubble, the incoming policies of new Fed Chair Kevin Warsh, and why China's massive gold accumulation is a major red flag for the US dollar.

Read The Forest for the Trees: https://fftt-llc.com

Follow Luke Gromen on X: https://x.com/LukeGromen

Follow Max on X: https://x.com/maxwiethe

Follow Other People’s Money on:

Apple Podcast https://bit.ly/4e7QJ1M

Spotify https://bit.ly/3Yhaazi

YouTube https://bit.ly/3C63VXR

X https://x.com/opmpod

Timestamps:

00:00 Intro

00:52 Bond Selloff Explained

04:54 Debt Spiral Mechanics

08:22 Global Defense Stimulus

09:58 Real Yields Reality Check

13:20 Fed Chair Fantasy

15:34 Sponsor Break Fundrise

16:57 AI Trade Meets China

20:52 Labor Data Warning

23:02 AI Backstop Coming

26:28 No Long Bond Floor

30:44 Gold Revaluation Debate

35:27 China Gold Buying Surge

36:31 Oil Reserves And Leverage

39:19 Pain Contest with The West

43:22 Inequality and Instability

47:18 Dollar Down Yield Trap

50:03 Buy the Dip

52:12 Gold Targets and Gradualism

54:50 Bitcoin Lags Tech Risk

58:47 Warsh Fed No Good Options

01:02:55 What Breaks First?

01:05:33 Bonds Are the Biggest Bubble