Bond prices are falling and treasury yields are rising due to problems caused by inflationary pressure and increased government debt from the war.
Bond traders want interest rates to be raised to reduce inflationary pressure and for the government to operate with austerity measures to curb debt growth.
The U.S. Treasury has temporarily declared a buyback to lower current treasury yields, and is helping Japan's currency management by selling U.S. treasuries (Japan holds a large amount of U.S. treasuries... if Japan sells U.S. treasuries, interest rates will rise sharply).
The reason why Trump keeps talking about growth is to lower the debt-to-GDP ratio and make it look fiscally sound, and he is constantly working hard to build factories in the United States for that purpose.
In fact, the annual fiscal deficit as a percentage of GDP is improving. In addition, Besant believes that explosive AI productivity can control inflation, and he thinks that AI productivity will eventually control inflation and bring about fiscal soundness. Kevin Wash also agrees with this view to some extent. That's why I think they are ultimately trying to see if "AI investment and AI productivity lower prices?".
Therefore, Besant is constantly working hard to keep treasury yields in check for the smooth investment and growth of hyperscalers, and he is strongly opposed to raising benchmark interest rates.
There are people who are looking at current treasury yields from a new perspective(?):
It's the view of Moon Hong-chul, the team leader and master of Sapatic interpretation. Of course, this person has been wrong more often than not, but there are some interesting points. He explains well the market perspective as a bond trader and the losses that bond traders are experiencing due to the current treasury yield rise.
Please refer to the video here
For those who have difficulty watching the video, please see the https://uclif.yeobak.com/videos/TVRjbVTT8nc summary.
I'm a layman when it comes to bonds, so I don't quite understand the argument that relaxing insurance company market value regulations could lead to buying long-term bonds. However, I think this gives us some insight into how bond traders view the market.
In addition to the above methods, the orthodox way to control current treasury yields is
to end the Iran war in the short term. If the Iran war cannot be ended, raising benchmark interest rates is the only option.
Market interest rates and bond yields are having a negative impact on risk assets such as stocks, and this is leading to a selling trend in mechanical macro direction.
This is an important issue that will determine the market direction in September and October, so it seems good to approach it from various perspectives.
