2022 to 2023 Bond Market Chaos — Vector Lens
June 4, 2025
Linear thinkers kept it simple:
Rates are rising. Therefore, bonds are uninvestable; thus, sell.
Binary thinkers framed it as a pivot watch:
Will the Fed hold or fold?
But those were surface-level takes. You needed to trace the deeper vectors—emotional, institutional, crowd-based.
- Emotional tone? It wasn’t panic. It was something worse: frustration bordering on fatigue. A kind of slow psychological burnout where conviction melts but fear doesn’t fully ignite.
• Institutional forces? The Fed tightened hard and fast. Too hard. Liquidity stress began to bleed through the cracks but not loudly enough to trigger rescue.
• Retail positioning? Decimated in 2022. Duration was a dirty word. When the crowd runs from a whole asset class, that’s dry powder for the contrarians.
• Media signal? Still bearish but less breathless. That shift from screaming to sighing is a psychological tell. Apathy is often the precursor to reversal.
• Resulting force? Not a reversal in rhetoric but a slow reconfiguration of expectations. Rate hike fatigue. Yields, in the long end, started to resist the narrative.
So, what was the vector story?
Not a sharp pivot. Not a dramatic crash. A grinding psychological inversion. Rates didn’t top because Powell blinked; they topped because the crowd ran out of emotional energy. That’s where true bottoms form. Quietly. Without permission.
So no, this isn’t about “bad news means sell” or “good news means buy.” That script is outdated. What matters is where the psychological current peaks, where institutional forces start to bend, and where emotional energy finally snaps or stops flowing.
That’s your signal. Not the headline. Not the Fed statement. Not the yield chart. The vector.
