Have we given up trying to call the top in G7 bond yields?

Because if we haven’t (given up), we probably should. This, like most attempts to call tops, seems a fool’s errand. If my saying that marks the top, well that’d be a further testament to markets’ penchant for making fools of the people who comprise them, wouldn’t it?

On Thursday, 10-year US Treasury yields reached 5.34%, the highest since 2002, when the Ba’athists were still in charge in Baghdad and I was… Jesus Christ, what was I doing in 2002? Making pickups for Big Tom between undergad Wittgenstein colloquiums, I guess.

There’s the chart. Don’t look too hard at it. It’ll burn your retina.

Mercifully (and I’m not sure that’s the right word considering one catalyst might’ve been a haven bid tied to mounting concerns that something’s about to break across the pond), US yields reversed lower around midday, and in rather dramatic fashion.

The figure below gives you some sense of how acute the situation is in Europe.

The OAT-bund spread’s vertical. On Thursday, it was the widest since the European sovereign debt crisis. In the UK, 30-year yields breached 6%. In Italy, 10-year yields are up 140bps since the start of the war and nearly 45bps over the past week alone.

I could go on. And on and on. What can’t go on and on and on is rate rise of that magnitude and rapidity. Something, somewhere will snap. It’s especially disconcerting for France and Italy, given they aren’t monetary sovereigns.

As noted above, the sense of panic might’ve accrued to America’s benefit on Thursday as a bid for the US long-end. And the ferocity of the reversal (10s went from 5bps cheaper to 8bps richer on the day in the space of three and a half hours, before unwinding about half the rally) testified to how quickly a move lower in yields could snowball given what’s gotta be crowded positioning in rate/bond shorts.

The front-end rallied too, amid what looks like an effort on the Fed’s part to walk back market pricing for an October rate hike. Philip Jefferson joined John Williams in suggesting this month’s meeting might be too soon to raise rates again. “[A]ny future adjustments in policy should be determined by carefully examining trends in the data,” Jefferson said at an event in Virginia. “My colleagues and I will need to come to our own judgment, which may take more time.”

Here’s the problem with that sort of thing: Donald Trump’s still out there demanding rate cuts. In a TIME feature piece published Thursday, for example, he said the following of the Fed board and the FOMC’s deliberation process more generally,

I don’t blame Kevin Warsh. It’s become very political. I don’t blame you, Kevin. I think it’s too bad. Not fair. We have a very hostile board, and the board says, ‘We want to hurt Trump.’ They’re not doing this for you. They’re doing this because they have Trump derangement syndrome.

That’s ridiculous, and to the extent anyone on the Fed board does harbor resentment towards Trump, he might remind himself that the enmity stems from his (ongoing) efforts to force Jerome Powell and Lisa Cook from their positions, if necessary by charging them with crimes they probably didn’t commit. That’s the sort of thing that makes people dislike you.

On Wednesday, Trump said he instructed Todd Blanche to comb through a report which cleared Powell of criminal wrongdoing in an absurdist probe aimed at discerning whether his alleged mismanagement of renovations at the Eccles building reached the level of criminality.

“The Inspector General’s Report just came out on Jerome ‘Too Late’ Powell’s ‘renovation’ of the Federal Reserve Headquarters,” Trump said, in a social media post than nearly ran to 500 words. “At a minimum, Powell should be forced to resign,” he went on. “He can’t manage a Building, and he certainly shouldn’t be allowed to manage his High Interest Rate Policy.'”

When Trump says things like that, he makes it immeasurably harder for Warsh to avoid raising rates. Because any hesitation looks like obsequiousness or worse, outright fear. That risk is so glaring that even the most diplomatic of rates strategists are compelled to acknowledge it, however obliquely.

“The risk posed by a more moderate pace of rate hikes is that investors begin to question the Fed’s commitment to fighting inflation in the current environment,” BMO’s Ian Lyngen remarked. “Such concerns help to explain the latest round of cheapening in the long-end of the curve, a read that is confirmed by modestly wider breakevens.”

Although the US long-end can (and surely will) be the recipient of safe haven flows in the event something “snaps,” and while it’s absolutely the case that a market this oversold could rally hard on an abrupt reversal as shorts cover and short-term momentum signals flip, Trump’s inadvertently putting a floor under the very rate(s) he wants so desperately to lower.