Paul Tudor Jones says , “With 122% of debt to GDP… you get in this vicious circle where higher interest rates cause higher funding costs cause higher debt issuance which cause further bond liquidation which cause higher rates.”

Interest on the debt will exceed defense spending in two years.  In about 4-5 years, 20% of taxes will pay interest on the debt.  This will soon be a culminating “grinding reality,” and we will have to deal with this.

Mr. Jones says the entire fiscal monolith will need to be dealt with by making reforms to Medicaid, Medicare, social security and raising taxes, and the bond market is telling us that the private sector needs to find $2.3T of additional required funding.  This is responsible for the 100 basis point bond yield rise.

Mr. Tudor Jones seems to agree with Becky Quick’s question whether the Fed has lost control of the bond market.  “We don’t have a clearing price yet for long-term debt.”  He believes we’ll go into a recession sometime in the first quarter of next year, because the bond market will need more rate hikes.

https://www.cnbc.com/squawk-box-us/?__source=vty%7Csquawkbox%7C&par=vty