The long-term risk of the US bond market has become a core contradiction in current global asset pricing. The so-called long-term risk refers to the risk that when interest rates rise, the price of long-term bonds will drop drastically. Last week, the US Treasury expanded long-term bond repurchase operations, which did not effectively suppress US bond yields; instead, it encouraged gold and Bitcoin to start “currency depreciation transactions.” On the evening of August 24, Beijing time, foreign media reported that the US Treasury may use nearly trillion US dollars of Treasury general account funds to buy back the bonds. Industry insiders have analyzed that even if this buyback rumor is true, it is still difficult to resolve the long-standing conflict over supply of US debt. Because of the current major buyers of US Treasury bonds and market pricing power, they have turned to private capital that is highly sensitive to valuations. Private capital allocates long-term debt and requires additional risk compensation for long-term risk, inflation risk, and oversupply risk. This may push long-term bond yields into a higher operating range. Furthermore, benefiting from the high interest rate market environment, the banking sector in the US, Japan, and European markets has all experienced rising prices since this year.

The long-term risk of the US bond market has become a core contradiction in current global asset pricing. The so-called long-term risk refers to the risk that when interest rates rise, the price of long-term bonds will drop drastically. Last week, the US Treasury expanded long-term bond repurchase operations, which did not effectively suppress US bond yields; instead, it encouraged gold and Bitcoin to start “currency depreciation transactions.” On the evening of August 24, Beijing time, foreign media reported that the US Treasury may use nearly trillion US dollars of Treasury general account funds to buy back the bonds. Industry insiders have analyzed that even if this buyback rumor is true, it is still difficult to resolve the long-standing conflict over supply of US debt. Because of the current major buyers of US Treasury bonds and market pricing power, they have turned to private capital that is highly sensitive to valuations. Private capital allocates long-term debt and requires additional risk compensation for long-term risk, inflation risk, and oversupply risk. This may push long-term bond yields into a higher operating range. Furthermore, benefiting from the high interest rate market environment, the banking sector in the US, Japan, and European markets has all experienced rising prices since this year.