Treasury Yields Defy Fed Rate Cut Expectations Amid Economic Uncertainty
The 10-year Treasury yield climbed to 4.21% - a three-month high - as markets priced in competing narratives. While Fed rate cuts appear imminent, bond markets signal deeper structural concerns.
Government debt sustainability and political pressures on central bank independence now outweigh monetary policy expectations. This divergence between short-term rates and long-term yields creates unusual conditions for risk assets.
Cryptocurrencies face mixed implications. Bitcoin and ethereum may benefit from liquidity expectations, while yield-sensitive altcoins confront tighter financing conditions. The 20 basis point yield surge suggests traders see persistent inflation risks despite Fed easing.