Fed microphone: Trump's election may trigger the "inflation resurgence" crisis! U.S. Treasury yields hit a three-month high

Nick Timiraos, a journalist from The Wall Street Journal, known as the "Fed megaphone", recently pointed out that Trump's election may reignite "inflation". On the other hand, the 10-year US Treasury bond Interest Rate has risen to 4.28%. (Summary: When will the biggest stock market bubble burst in history? Analysts: Not afraid of economic recession, the real danger is the difference in Interest Rate between Japan and the US) (Background: After the big dump in the A-share market》, the People's Bank of China is now on the road to "swap convenience" with an initial scale of 500 billion RMB coin, Ray Dalio: Investing in China remains challenging) The US officially announced a 2-point rate cut in September this year, the first rate cut since 2020, which cheered the market. Currently, the market is closely following whether the Fed will cut Interest again in the remaining two meetings this year. One of the key factors for the Fed's successful rate cut is that the US must continue to move towards a 2% inflation rate. However, Nick Timiraos, a journalist from The Wall Street Journal, known as the "Fed megaphone", recently pointed out that the decline in inflation is mainly due to the Fed's rate hikes, supply chain improvements, and labor market rise. However, whether the future borrowing costs and prices can continue to slow down will depend on the policy choices of Trump or Biden. Timiraos pointed out that although both candidates support economic rise policies, economists and conservative advisers are concerned that Trump's policies (such as comprehensive tariffs, repatriation of illegal immigrants, and pressure on the Fed to cut Interest...) may pose more risks and reignite inflation. Biden plans to address high living costs by increasing housing construction, cracking down on price manipulation, and expanding childcare tax deductions. Although there is also a lack of specific plans to reduce the deficit, scholars believe that if the Democratic Party continues to be in power, inflation may remain stable but slightly higher. The US Treasury bond Interest Rate has risen to 4.28%. The US will soon hold the presidential election on November 5th. Some people are worried that if the Trump administration comes to power, it will have to borrow a large amount of money to fulfill the campaign promises made during the election, and the federal government's debt and deficits will skyrocket, forcing Congress to raise the debt ceiling. This may be the reason for the recent sell-off in the bond market. As shown in the figure below, the 10-year US Treasury bond Interest Rate is still rising approximately, reaching a three-month high. This may put pressure on the Fed's decision on the next rate cut. Why does the US Treasury bond Interest Rate continue to rise? Why does the US Treasury bond Interest Rate continue to rise in the background of the Fed's rate cut cycle? Experts analyze possible reasons: The US Treasury continuously issues bonds to fill the government deficit (combined with concerns that if Trump returns to the White House, the US fiscal deficit may increase again) The Fed's attempt to shrink its balance sheet has eliminated a large amount of government bond demand Recent economic data shows that the effectiveness of curbing inflation is still stuck The latest data from the CME Fed Watch Tool shows that the market currently believes that the probability of maintaining the current Interest Rate of 4.75% to 5% in November has decreased to 4.9% from a week ago, and the probability of a 1-point rate cut to 4.5% to 4.75% has increased to 95.1%, with most people still betting that the Fed will continue to cut Interest. Related reports China's housing market rescue promotes "4+4+2" stimulus policies, but the problem of unfinished buildings is difficult to solve, and construction stocks have fallen instead of rising. Taiwan's stock ETF "00887" has fallen by 79% in ten days, and the Financial Supervisory Commission: A perfect little storm! Not ruling out artificial speculation China is rumored to impose a 20% heavy tax on the super-rich, will BTC become a safe haven for funds? This article was originally published on BlockTempo, the most influential blockchain news media in the D-Quadrant.