7% Treasury Yields by 2028? The Midterm Warning

Key takeaways

Chris Casey predicts Democrats will probably win both chambers, but says the more important consequence is how the election’s issues shape the 2028 presidential race.
Casey believes persistent deficits and nearly $40 trillion of national debt could drive the 10-year Treasury yield toward 7% by 2028.
Higher rates would especially pressure expensive growth and technology stocks through valuation or “multiple” compression, while bonds could remain in a prolonged bear market.
Casey favors inflation hedges including precious metals, real estate, and cryptocurrencies as a core portfolio base, with more speculative AI exposure layered on top.
He sees AI regulation as a significant risk that could arrive suddenly after a major AI-related catastrophe and potentially improve the competitive position of Chinese technology firms.

Summary

Casey expects Democrats to win both chambers

Maggie Lake asks how important the approaching midterm election is. Chris Casey says it matters, but is not uniquely historic, and jokes that voters are probably ready for the advertisements to end. He predicts Democrats will win both houses, citing predictive markets, midterm history favoring divided government, stronger Democratic fundraising and turnout, gas prices above $4, and Donald Trump’s roughly 37% approval rating. Casey cautions that predictive markets and polls can fail, pointing to recent errors in Brazil and Israel.

Gridlock may limit legislation but worsen deficits

Casey says markets usually like divided government because less policy damage gets done, but Democrats controlling Congress could still use investigative power, regulatory oversight, and control of nominations. He expects investigations of technology executives who aligned themselves with Trump, resistance to deregulation in banking and crypto, and possible influence over energy and AI policy. Because Trump passed little even with both chambers, Casey thinks future legislation would require broad compromises resembling the “one big, beautiful bill,” producing more spending, higher deficits, or at least no improvement.

A slow-moving bond market could push the 10-year to 7%

Casey says the election matters beyond the next two years because its issues and outcome will shape the 2028 campaign. He believes the bond market is only slowly recognizing the danger of nearly $40 trillion in debt, with the government spending roughly $6–8 trillion against $5–6 trillion of revenue. Comparing the market to a teenager ignoring five snooze alarms, he says rates could rise sharply as investors recognize an existential fiscal threat. A 7% 10-year Treasury yield by the 2028 election would not surprise him.

Affordability is fueling populism and regulatory pressure

Lake connects higher debt and prices to grassroots dissatisfaction. Casey says populism is already established through Trump and is likely to remain central because healthcare, electricity, food, and costs associated with the Iran war have become more expensive. He expects Congress to summon technology and utility executives, possibly impose price caps, and scrutinize AI. Casey also objects to the government taking stakes in private companies, arguing that ownership distorts governance and makes regulation easier: officials can effectively say, “We own you.”

Higher rates threaten expensive stocks and revive wealth-tax fears

Casey says equities historically decline during midterm years and often rebound afterward, but rising yields create a different risk. Bonds have suffered an unusually prolonged bear market, and stocks whose value depends on distant cash flows are vulnerable because higher rates reduce their present value; high-multiple companies face “multiple compression.” He is also concerned about wealth taxes and higher taxes as financial repression, citing billionaire-tax initiatives and California’s wealth-tax proposal. He says his time in Illinois may have a limited shelf life and urges people to plan accordingly.

AI and the debt crisis are Casey’s two core investment themes

Casey identifies AI— including its energy, electricity, commodity, and infrastructure suppliers—and the eventual U.S. debt crisis as the two major themes for the next two to five years. He recommends building a core allocation to inflation hedges such as precious metals, real estate, and cryptocurrencies, then taking smaller risks in AI and related industries. AI regulation is a bipartisan risk that could accelerate after a catastrophe; if U.S. policy becomes nationalization or draconian regulation, Chinese AI could benefit, though Casey is still investigating that possibility. Clients’ main concerns are rates, prices, and AI valuations.

Show notes

Could the 10-year Treasury yield hit 7% by 2028? And what would that mean for stocks, bonds, gold, and your portfolio?

📈 Get a complimentary portfolio review: https://bit.ly/4e9LsJV

As the 2026 U.S. midterm elections approach, Chris Casey, founder and managing director of WindRock Wealth Management, joins Maggie Lake to explain why America's mounting debt crisis could pose a much bigger threat to investors than the election results themselves.

With U.S. national debt approaching $40 trillion, Casey warns that continued government spending and rising deficits could eventually force bond yields significantly higher. He believes a 7% yield on the 10-year Treasury by 2028 is a realistic possibility — a scenario that could trigger serious pressure on stock valuations, particularly high-multiple technology companies.

But the risks don't stop with interest rates.

Casey examines how the midterm elections could reshape government spending, financial regulation, taxes, and the outlook for technology companies. He also explains why America's debt problem makes inflation hedges and real assets increasingly important for long-term investors.

In this conversation, Maggie and Chris discuss:
-📉 The 7% Treasury Warning: Why rising government debt could push bond yields dramatically higher.
-🏛️ The 2026 Midterm Elections: What divided government, congressional gridlock, and changing policies could mean for financial markets.
-💰 America's Debt Crisis: Why persistent deficits could threaten purchasing power and fuel future inflation.
-📊 Stock Market Risks: How rising interest rates could trigger valuation compression, especially in expensive growth stocks.
-🥇 Gold and Real Assets: Why Casey favors precious metals, real estate, and cryptocurrencies as potential inflation hedges.
-⚡ Technology and Regulation:How changing U.S. policies could create unexpected risks for American technology companies and opportunities for international competitors.
-🛡️ Portfolio Diversification: How investors can think about balancing inflation protection with long-term growth opportunities.

#TreasuryYields #NationalDebt #StockMarket #MidtermElections #Wealthion

Chapters:
00:00 Could Treasury Yields Hit 7%? The Debt Crisis Warning
00:17 2026 Midterm Elections: What Investors Need to Know
01:22 Chris Casey's Midterm Election Outlook
03:40 How Congressional Gridlock Could Impact Markets
05:50 America's $40 Trillion Debt Problem
06:43 Could the 10-Year Treasury Yield Reach 7%?
08:42 Inflation, Affordability and Rising Consumer Costs
10:27 Washington's Regulatory Risks for Tech and Utilities
12:16 Stock Market Risks: Rising Rates and Valuation Compression
14:24 Wealth Taxes and Financial Repression Concerns
16:41 Two Major Investment Themes for the Next 5 Years
18:04 Could US Regulation Give Chinese Tech an Advantage?
21:34 Gold, Real Estate and Crypto as Inflation Hedges
22:40 Interest Rates, Market Valuations and Investor Concerns
23:42 Final Takeaways and Portfolio Review

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