Steve Hanke argues the US economy faces persistent inflation (3.8% CPI) due to accelerating money supply growth, not just the Iran conflict. He sees the 10-year yield at 4.5% as a serious threshold that could trigger bond vigilante action. He is bearish on global growth due to the US-Israel war on Iran and expects commodity super-cycle. He advocates for a flat tax and constitutional balanced budget amendment.
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aluminum sharp up
Johns Hopkins University
1.8
University
Steve Hanke 9.0
University
Steve Hanke 9.0
6/2/2026 8:11:34 PM
dxy
Hanke focuses on inflation and commodity prices rising, which typically pressures the dollar, but he does not explicitly forecast the DXY. Given his view on persistent US inflation and fiscal deficits, the dollar is likely to remain under pressure but not sharply decline in the short term.
metals
All the commodities are up strongly... aluminum, lithium, vanadium, helium... it's the start of a super cycle with commodity prices all of them going up.
ndx
Hanke says the 10-year at 4.5% is a danger zone that puts pressure on all asset classes. Higher yields typically compress tech valuations (NDX). He also sees rising commodity prices and inflation as headwinds for growth stocks.
rut
Hanke notes consumers are getting more leverage, real wages are negative, and credit card delinquencies are at highs. Small caps (RUT) are more sensitive to consumer health and higher rates, suggesting downside risk.
wti
By the time we get into midsummer or late summer with a closure remaining in effect, we'll have some sharp price increases in oil.
| 5/1/2026 8:08:31 PM | short term sharp up | 7 days later | -7.85% | -11.77% |
| 4/18/2026 7:12:10 AM | short term sharp up | 7 days later | +7.54% | +11.32% |
| 3/28/2026 1:03:12 AM | medium term sharp up | 21 days later | -12.90% | -19.35% |
| 3/8/2026 11:37:31 PM | short term sharp up | 7 days later | -1.34% | -2.01% |
yields
I think the 4.5% threshold is pretty serious. If we stay up over 4.5% on the 10-year on a sustained basis, the bond vigilantes will have their day in the sun.
| 3/28/2026 1:03:12 AM | medium term sharp up | 21 days later | -2.12% | -3.18% |
