The Next Banking Crisis Is A Failure Away
Addison Wiggin / May 23, 2025
Bond yields are soaring, with the benchmark 30-year U.S. Treasury bond hitting 5.15% this week.
With yields rising, bond holders are sitting on substantial losses. Perhaps the worst of those losses are in the banking sector.
In total, U.S. banks are sitting on over $480 billion in unrealized losses.
Remember, it took a much smaller crack in the bond market to lead to the collapse of Silicon Valley Bank, the second-largest bank failure in U.S history.
As we noted in Grey Swan Live! yesterday, unrealized bond losses may have to be realized at an inopportune time. The Federal Reserve was able to paper over those losses last time quickly, but events could quickly run out of control.
~ Addison
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