Bondholders, not the Fed, will decide how high US yields go: Investor

• Bondholders are controlling interest rates, demanding higher returns due to perceived US fiscal indiscipline.
• US Treasury yields are likely to climb further, potentially above 5%, as lenders demand a higher return for risks.
• Equities with growing dividends are preferred over long-dated US Treasury bonds for better long-term returns, despite current high bond yields.

David Kuo argues that bondholders, driven by concerns over US fiscal discipline, are the primary force pushing US Treasury yields higher. He suggests that while current 5% bond yields are attractive, equities, particularly dividend-paying stocks, offer a superior long-term return due to their potential for increasing income over time.