When Safe Assets Get Scary: Understanding Treasury Turbulence and What Comes Next, and the Implications for Real Estate

Last week’s bond market volatility was a wake-up call. Here’s what happened, what the Treasury market really is, and how Egg Capital’s real estate strategies are built for resilience.

Last week, the U.S. Treasury market - the most important fixed-income market in the world - experienced one of the most volatile weeks in half a century. The 10-Year Treasury yield jumped more between Monday and Friday than it has in 99% of weeks over the last 50 years.

To put it in perspective, that kind of move places last week in the top 1% of all weeks for yield volatility - an extremely rare event in the world’s most stable debt market.

To understand why that matters - and what it means for private investors like you - let’s break it down.

What Is the Treasury Market, and Why Is It So Important?

The U.S. Treasury market is where the federal government issues debt to fund everything from infrastructure and defense to entitlement programs. It's massive: over $27 trillion in marketable debt, with about $1 trillion traded every single day.

But Treasuries do more than just fund the government. They’re the foundation of global finance:

• Benchmark for Risk: Treasury yields are the “risk-free rate” used to price everything - from corporate bonds to real estate cap rates.

• Collateral Backbone: Banks, hedge funds, and other institutions pledge Treasuries as collateral in the repo market and derivatives trades. They’re the plumbing of modern finance.

• Safe Haven: In times of uncertainty, global investors rush into Treasuries for security.

• Macro Barometer: Treasury yields reflect expectations for inflation, economic growth, and monetary policy. Think of them as the market’s collective economic forecast.

So when yields move suddenly and sharply, it’s not just a blip - it’s a signal that something deeper may be shifting in the capital markets.

Why Did Yields Spike Last Week?

There are two dominant narratives behind last week’s volatility:

1. A Growing Lack of Confidence in U.S. Fiscal Discipline

Some investors worry that the U.S. is following a familiar pattern seen in history - running up massive debts until lenders begin to question long-term sustainability. As Ray Dalio puts it, great powers often fall into this trap, and the market begins demanding higher yields to compensate for higher perceived risk.

2. The “Basis Trade” Blow-Up

Others point to a more technical reason: hedge funds exploiting small spreads between Treasury bonds and futures (known as the “basis trade”) were forced to unwind billions in leveraged positions as rates moved quickly. That cascade of selling pushed yields higher in a short timeframe.

Whether the cause is structural or tactical, the result is the same: volatility in what is supposed to be the world’s most stable market.

What Does This Mean for Investors?

For investors in stocks, bonds, or high-growth tech, the whipsaw in Treasury yields can dramatically affect valuations and capital flows.

It also underscores a larger truth: when the foundation shakes, everything built on top feels the impact.

Why Egg Capital Focuses on Real Assets - and Why That Matters Now

At Egg Capital, we don’t chase market headlines - we build around durable fundamentals. We believe the current environment makes our focus on private, real asset investing more important than ever:

Here’s why:

• Stability in Volatile Times: Income-generating real estate offers steady cash flow, even when public markets swing.

• Hard Asset Security: We invest in tangible, collateral-backed assets - not narratives or projections.

• Inflation Resilience: Real estate historically benefits from inflation due to rent growth and asset appreciation.

• Control and Transparency: Unlike public markets, private investments offer more control over operations, capital structure, and exit timing.

• Non-Correlation: Our private deals move independently of daily market sentiment, creating diversification for high-net-worth portfolios.

Our Approach: Disciplined, Institutional, Investor-Aligned

Egg Capital was built by professionals who’ve executed over $1.3 billion in institutional real estate transactions. We’ve sat on both sides - underwriting investments for large funds and investing personally as individuals. That dual lens shapes how we underwrite, manage, and present opportunities to you.

We offer:

• Private credit with downside protection and predictable income

• Multifamily syndications in growing markets

• Transparent reporting and investor-first communication

We’re focused on protecting and growing capital through carefully selected, high-conviction real estate investments.

Final Thoughts

When the Treasury market becomes this unstable, it’s a sign to reevaluate what you’re relying on to build long-term wealth. For us - and our investors - that answer lies in real assets, real returns, and real alignment.

If you’d like to learn more about how we’re navigating these shifts - or want early access to our upcoming private offerings - reach out here. We’d love to talk through what we’re seeing and how we’re positioning for what’s ahead.

Eric Fitzgerald

Co-Founder & Managing Partner

Egg Capital

www.eggcapital.com