U.S. Bond Market Signals Economic Concerns Amid Rising Yields

According to Odaily, QCP has highlighted the United States' demonstration of its power and strategic brinkmanship through exaggerated tariff figures, employing deterrence tactics. The bond market is now signaling warnings as the 10-year U.S. Treasury yield has surged to 4.6%, and the 30-year yield has surpassed 5%, unsettling risk sentiment. If U.S. President Donald Trump aims to boost the stock market during his term, long-term yields need to decrease rather than increase. The bond market sell-off has intensified pressure on the Federal Reserve to intervene, suggesting a nearing turning point. Last week, the Federal Reserve indicated its readiness to act to stabilize financial conditions. Board member Waller further emphasized this shift, suggesting the Fed's focus is moving towards recession risks, subtly downplaying persistent inflation issues, now described as "transitory." The Fed has previously labeled various inflation cycles as "transitory," though they have been far from temporary. Nonetheless, the Fed's protective measures are drawing closer, with the market now anticipating 3.5 rate cuts in 2025. Meanwhile, as geopolitical tensions rise, gold continues to climb. With U.S. Treasuries and the dollar losing some of their traditional safe-haven appeal, gold has become the preferred store of value in the market. Unlike gold, Bitcoin has not attracted safe-haven demand. The "alternative store of value" narrative has failed to gain traction in the current macroeconomic environment. Market participants remain defensive, focusing on hedging downside risks until a clearer situation emerges.