Adani Group Chief Financial Officer Jugeshinder Singh has publicly countered veteran banker Uday Kotak's alarm over rising US Treasury yields, stating that the current environment is a return to normal rather than a financial crisis. Singh described the panic over current yield levels as "pure comedy," arguing that an entire generation of money managers became "addicted to the 2008–2021 Fed liquidity drip."
Earlier, Kotak, founder of Kotak Bank, had described surging US bond yields as the "Achilles heel" of global finance. He noted the 10-year yield crossed 4.70% and the 30-year hit 5.20%, despite the Federal Reserve holding rates steady, suggesting this would shrink liquidity.
Zero Rates: An Artificial Anomaly
Singh vehemently disagreed with Kotak's assessment, asserting that zero interest rates were never normal. "They think zero interest rates are normal. They aren't," Singh wrote on X. He added that the prolonged era of easy money had distorted capital allocation, calling it "an artificial anomaly that subsidized lazy capital and lazy bankers."
To support his argument, Singh pointed to historical data, noting that US Treasury yields remain below long-term averages. He highlighted that from 1990 to 2008, an era he described as the "most stable era of modern growth," the average 10-year yield was 5.68%, with a median around 5.35%. "We aren't in a crisis; we are returning to historical sanity. Capital finally has a cost again," he stated.
Businesses Must Adapt to New Reality
The Adani CFO also emphasized that businesses that have become dependent on sustained monetary accommodation must now adapt to the new economic environment. He warned that any business model requiring central bank manipulation of liquidity for survival is not a viable business but rather a "charity case."
"Easy mode is over. Welcome back to reality," Singh concluded.
The Federal Reserve recently left interest rates unchanged for a fifth consecutive meeting. Despite this policy pause, US Treasury yields climbed, with the 30-year yield touching 5.21%—its highest level since 2007—and the benchmark 10-year yield rising to nearly 4.69%, approaching its highest in over a year.