Bonds To Reverse Soon As Yields Approach 'Line In The Sand'? Michael Lebowitz

September 10, 2026

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5 min read

Bond Yields Are Rising, But the Fundamentals Tell a Different Story

The 10-year Treasury yield has been grinding higher toward 5% — levels not seen in two decades — and Michael Lebowitz of Real Investment Advice says the move is being driven by narratives, not fundamentals. "I'm not dumb," he told Adam Taggart on Thoughtful Money. "I realize that it's the narratives that are the short-term driver. Bond yields can go higher from here. I do think that 10-year bond yields at 5% is potentially a line in the sand for both the economy, the stock market, and definitely the Treasury and possibly the Fed."

Fundamentals vs. Narratives: A Growing Divergence

Lebowitz draws a sharp distinction between what bond fundamentals actually show and the stories the market is telling itself. On the fundamental side, core CPI sits at 2.5%, trimmed-mean PCE (the measure Powell himself has said he prefers) is at 2.3%, and breakeven inflation expectations are around 2.4% — all roughly where they were before the Iran conflict began. Inflation, properly measured, does not warrant yields at current levels.

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What you'll learn

1 (01:00) **Opening Thesis: 5% Is the Line in the Sand** - Michael states that while yields can go higher short-term due to narratives, 5% on the 10-year is a critical threshold for the economy, stock market, Treasury, and possibly the Fed.
2 (02:54) **Core Framework: Fundamentals vs. Narratives** - Michael explains the distinction between bond fundamentals (inflation, employment, growth) and market narratives (stories that can temporarily divorce price from reality).
3 (05:07) **The Fundamentals Don't Justify Higher Yields** - Michael shares a slide to argue that core inflation measures (trimmed mean PCE, core CPI) are not significantly higher than before the Iran conflict began.
4 (15:16) **The Narratives Driving Yields Higher** - Michael lists the specific stories that are pushing yields up, including high oil prices, massive fiscal deficits, AI-related debt issuance, and Bank of Japan intervention.
5 (19:31) **The 5% 'Line in the Sand' and the Market Put** - Michael reiterates that 5% on the 10-year is a potential maximum, but clarifies that the "market put" from institutional buyers (pension funds, insurance companies) is more powerful than any central planner intervention.
6 (24:39) **Historical Opportunity in Bonds** - Michael shows a slide of 10-year annualized returns for bonds, illustrating that periods of terrible prior returns (like now) have historically been followed by strong subsequent returns.
7 (27:34) **The 'Free Option' in Bonds** - Michael explains the strategic advantage of buying bonds now: you lock in a high yield, but if yields fall (and prices rise), you can sell for a capital gain and redeploy into stocks on sale.

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Show Notes

LOCK IN YOUR EARLY BIRD PRICE DISCOUNT FOR THOUGHTFUL MONEY'S FALL ONLINE CONFERENCE (OCT 17TH) at https://www.thoughtfulmoney.com/conferenceThe yield on the US Treasury 10-year bond is now dangerously near 5%That's the "line in the sand" portfolio manager Michael Lebowitz sees that, once hit, the economy and financial markets will start to buckle, and the Treasury and (likely) the Fed feel forced to step in an intervene to bring yields down.So, contrary to the current swirl of narratives projecting that yields will keep rising into 2027, Michael concludes it's more likely that they will peak soon and instead trend downwards for the next year or two.For all things bond-related, watch this video.#bonds #bondyields #interestrates _____________________________________________ Thoughtful Money LLC is a Registered Investment Advisor Promoter.We produce educational content geared for the individual investor. It’s important to note that this content is NOT investment advice, individual or otherwise, nor should be construed as such.We recommend that most investors, especially if inexperienced, should consider benefiting from the direction and guidance of a qualified financial advisor registered with the U.S. Securities and Exchange Commission (SEC) or state securities regulators who can develop & implement a personalized financial plan based on a customer’s unique goals, needs & risk tolerance.All the details on Thoughtful Money's relationship with the financial advisors it endorses, many of whom regularly appear on this program, can be found in the following documents. We highly recommend you review these documents as they cover the terms that will apply should you choose to work with one of these firms at any time after watching this video.Thoughtful Money Disclosure Document: https://thoughtfulmoney.com/disclosureThoughtful Money Agreement: https://thoughtfulmoney.com/agreementIMPORTANT NOTE: There are risks associated with investing in securities.Investing in stocks, bonds, exchange traded funds, mutual funds, money market funds, and other types of securities involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods.A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.Thoughtful Money and the Thoughtful Money logo are trademarks of Thoughtful Money LLC.Copyright © 2026 Thoughtful Money LLC. All rights reserved.