2025-12-31 04:25:20

This year's US Treasury yields have indeed been trending downward, but interestingly—this decline is mainly concentrated in the short and medium term. The 2-year and 5-year yields have fallen quite sharply, the 10-year has also seen some retracement, but the 30-year yield has basically remained unchanged.

What does this phenomenon reflect? Essentially, the market is playing a clever game. On one hand, everyone is betting that policy interest rates will continue to be cut, so short-term bond yields have responded accordingly. On the other hand, regarding long-term inflation prospects and government fiscal conditions, the market is actually uncertain, so long-term bond yields are reluctant to fall significantly in tandem.

Some analysis institutions expect the yield curve to gradually return to a more normal upward slope, with the 10-year yield possibly oscillating between 4.0% and 4.2%. It sounds promising, but there are risks—if by 2026 inflation finally stabilizes at around 2.5% to 3%, there is still a possibility that long-term yields could spike to 5%. Once that level is reached, real estate and other interest rate-sensitive industries may face renewed pressure.

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YieldWhisperer

· 17h ago

The short end falls while the long end doesn't, and that's the market saying— we simply don't believe in the long term. If it really rises to 5%, my house will be completely hopeless, and I'll have to suffer more losses. Honestly, it's all about betting on interest rate cuts. And after betting on that, what then? No one wants to

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NeonCollector

· 18h ago

This curve is abnormal. Long-term bonds just can't see through the upcoming situation... Honestly, this round is indeed the market betting; the short-term interest rate cut expectations are too strong. If 5% really comes, the real estate sector will be uh... probably another round of chopping up the chives. What does it mean that long-term bonds haven't followed suit? Nothing more than a lack of confidence. Short-term bonds are falling so much, but the long end remains unmoved—that's what we call the truth. No one dares to guarantee how inflation will develop, so long-term bond yields have become a "value vacuum." It's that same pattern—optimistic policies, pessimistic fundamentals, and the market bouncing back and forth between these two.

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DiamondHands

· 18h ago

It's the same old trick of "looks stable but actually turbulent," the market is really playing it well. Those trying to bottom fish in short-term bonds will probably regret it; long-term bonds are indeed resistant to declines for a reason. Once the 5% threshold is broken, the real estate sector will have to find someone to take the blame again. Basically, no one dares to bet on the long term, and that mindset is just incredible. Short-term bonds keep falling endlessly, while long-term bonds are still pretending to be resilient—who would believe that?

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GlueGuy

· 18h ago

Short-term bonds plummeted while long-term bonds remained unchanged. I've seen this trick before... The market is just timid, not daring to be certain about the future. A 5% yield will really cool down the real estate market, and then we'll have to go through another round of turmoil. The 30-year term is truly ridiculously stable, feels like someone is waiting for something.

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PriceOracleFairy

· 18h ago

the curve inversion is literally just market pricing in rate cuts while staying paranoid about long-term inflation... classic oracle manipulation energy tbh, short end getting rekt while long end plays it cool. that 5% ceiling scenario tho? real estate about to witness another MEV moment fr fr

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