赤字、インフレ、そして新FRB議長：米国債利回り5％超えの深層ロジックと市場のリセット

Key Data: 10-Year Yield 4.61% to 4.687% · 30-Year Yield 5.2%, Highest Since 2007 · S&P 500 Falls for Third Consecutive Day · Warsh Confirmed as New Fed Chair · The One Big Beautiful Bill Projected to Add $2.8 Trillion to Deficit · 62% of Fund Managers Expect 30-Year Yield to Reach 6%

Section 1 – What Is Happening Right Now

During the week of May 15-19, 2026, long-term US Treasury yields surged to multi-year highs. The 10-year Treasury yield climbed to 4.61% on May 18, hitting a one-year high, before rising further to 4.687% on May 19. The 30-year Treasury yield soared to 5.2%, its highest level since 2007. The S&P 500 fell over 1% on May 15 and dropped another 0.67% on May 19, marking its third consecutive losing session. The Nasdaq fell 0.90%, and the small-cap Russell 2000 index declined 1.33%.

Multiple factors are converging simultaneously. Inflation data came in hotter than expected. Wholesale prices rose 6% year-over-year in April, indicating the highest upstream inflationary pressure in years. The US debt trajectory continues to deteriorate. A new Fed chair is taking over the most complex inflation situation in years. A massive tax cut bill is projected to add trillions of dollars to the national debt over the next decade.

The bond market is shouting loudly, and the stock market is finally starting to listen.

Educational Note: A US Treasury yield is the interest rate the US government pays to borrow money. When yields rise, it means the government must pay higher interest to attract creditors – either because investors demand higher risk compensation, or because bond supply exceeds market demand.

Section 2 – Four Reasons for the Yield Surge

Reason 1: Stubborn Inflation

April inflation data released on May 15 exceeded market expectations, directly triggering an immediate spike in yields. Wholesale prices rose 6% year-over-year in April, setting a multi-year high for upstream inflation records, indicating that price pressures are not just at the consumer level but are propagating upward through the entire supply chain.

Since September 2024, the Federal Reserve has cumulatively cut interest rates by 175 basis points – 100 basis points in the second half of 2024 and another 75 basis points in the second half of 2025. Under normal circumstances, long-term yields should have followed suit. However, the reality is starkly opposite: the 10-year yield has only fallen by about 35 basis points, while the 30-year yield has not fallen but instead touched 5.2%. Mark Malek, Chief Investment Officer at Siebert Financial, stated in a widely circulated article that this divergence is "unprecedented": "Historical data going back to 1990 shows never such an anomalous disconnect between Fed policy and long-term yields."

Market pricing now shows that the probability of a rate hike by December 2026 has risen to 48%, compared to just 14% a week earlier. The probability of a rate cut is below 1%. The bond market's expectations have shifted from "pausing rate cuts" to beginning to price in "returning to rate hikes."

Reason 2: A New Fed Chair Takes Over a Crisis

On May 13, 2026, the US Senate confirmed Kevin Warsh as the new Federal Reserve Chair by a vote of 54 to 45, marking the most controversial confirmation vote for a Fed chair in history. His term officially began on May 15 when Jerome Powell's term expired. Powell chose to remain as a member of the Fed Board of Governors.

Warsh takes over at a time when US inflation has exceeded the Fed's 2% target for over five consecutive years, energy prices remain high due to the US-Iran conflict, and the bond market is calling for a clear return to fiscal discipline. JPMorgan now expects the Fed to keep rates unchanged throughout 2026, with the earliest possible rate hike of 25 basis points in the third quarter of 2027. Warsh stated in his confirmation hearing that the Fed needs a "different framework for fighting inflation." His first Federal Open Market Committee (FOMC) meeting is scheduled for June 16-17, and every statement he makes will move the markets.

Reason 3: The US Debt Problem is Intensifying

The US annual fiscal deficit is approximately $2 trillion, and interest payments on the existing debt alone are already approaching $1 trillion annually. The Treasury Department estimates it will need to borrow $189 billion in the second quarter of 2026 alone, $79 billion more than forecast just a few months ago. Actual borrowing in the first quarter of 2026 was $577 billion, and borrowing in Q3 is projected at $671 billion.

Every bond issued must find a willing investor. When market supply exceeds natural demand, the only mechanism to restore balance is higher yields. The International Monetary Fund has warned that the "safe premium" on Treasury bonds – the extra demand they enjoy as the world's safest assets – is fading. Once this safe premium disappears, yields must rise to compensate for the gap.

Reason 4: The One Big Beautiful Bill and Moody's Downgrade

The One Big Beautiful Bill (OBBB), signed into law in 2025, permanently extended the tax cuts from Trump's first term and added new tax reduction provisions. The Congressional Budget Office estimates the bill will increase the fiscal deficit by $2.8 trillion over the next decade. If all temporary provisions are made permanent, the Committee for a Responsible Federal Budget estimates the cost could be $4 to $5 trillion.

On May 16, 2025, Moody's downgraded the US sovereign credit rating from Aaa to Aa1, becoming the last of the three major rating agencies to downgrade the US. S&P had already downgraded in 2011, followed by Fitch in 2023. Moody's cited the failure of successive governments to effectively address soaring deficits and interest costs. It is estimated that by 2035, federal interest payments will account for 30% of government revenue, compared to 18% in 2024 and just 9% in 2021.

A Bank of America survey released on May 19 showed that 62% of global fund managers expect the 30-year Treasury yield to eventually hit 6%, the most bearish consensus on bonds since late 1999. The term "bond vigilante" has re-entered market discourse – a concept coined by veteran Wall Streeter Ed Yardeni in the 1980s to describe traders who punish fiscal profligacy by selling bonds, pushing yields higher to force governments to confront their fiscal problems. The modern-day "bond vigilante," as Malek notes, operates as "a slow, systematic campaign of pressure."

Educational Note: A yield curve is a graph showing the relationship between yields on Treasury bonds of different maturities. When long-term yields rise much faster than short-term yields, it's called a "bear steepener." This typically means investors are worried about long-term inflation and fiscal sustainability, even if short-term policy rates are relatively stable.

Section 3 – Why Rising Yields Hit the Stock Market

Rising yields pressure the stock market through four distinct channels.

Channel 1: Discounting Effect

The value of every stock is the present value of all its future earnings discounted back to today. The higher the discount rate, the lower the present value. Rising yields directly push up the discount rate, disproportionately hurting high-growth tech stocks because a large portion of their value comes from earnings projected years into the future. 2022 serves as the best reference: the 10-year yield surged from 1.5% to 4.3%, the Nasdaq fell 33%, and Nvidia was cut in half, dropping over 50%. The vast majority of these losses came from multiple compression, not deteriorating earnings. The pace in 2026 is more gradual, but the mechanism is identical.

Channel 2: Competition Effect and Equity Risk Premium

When the risk-free 30-year government bond yields 5.2%, stocks must offer a return significantly higher than that to convince investors to take on additional risk. Currently, the S&P 500's earnings yield is about 4.2%, while the 10-year Treasury yield is 4.6%. This means investors are getting a lower return from stocks than from risk-free bonds – an unusual and likely unsustainable state. The equity risk premium has been compressed to near zero. History shows this state is ultimately corrected either by falling stock prices or falling yields. Currently, yields are not falling.

Channel 3: Borrowing Cost Effect

When Treasury yields rise, borrowing costs across the entire economy climb. As of mid-May 2026, 30-year fixed mortgage rates have risen to between 6.34% and 6.54%. Corporate financing costs increase, and consumer spending on housing, cars, and credit cards is constrained. The signal from the bond market ultimately reaches every household and every corporate balance sheet.

Channel 4: Strong Dollar and International Capital Flow Effect

Rising US yields attract global capital towards dollar-denominated assets, pushing up the dollar's exchange rate and putting translation pressure on the overseas earnings of US multinational corporations. For Asian investors, capital flowing to the US puts pressure on Asian currencies, Real Estate Investment Trusts (REITs), and yield-oriented assets. This yield surge has a global resonance: the UK 10-year gilt yield broke above 5.1%, Japanese government bond yields rose to 2.71%, their highest since 1997, and German Bund yields also climbed in tandem. When global bonds are sold off together, the pressure on stock markets is amplified everywhere.

Educational Note: The equity risk premium is the extra return investors demand from stocks relative to the risk-free rate. Currently, the S&P 500 earnings yield is around 4.2%, while the 10-year Treasury yield is 4.6%, meaning stocks are technically less attractive than bonds. This state of compressed premium is historically a leading indicator of stock market weakness, as capital tends to flow toward assets with higher yields and lower risk.

Section 4 – Impact on Different Investor Types

Stock Investors

The environment is unfavorable for high-valuation growth stocks. Banks, insurance companies, and value-oriented cyclical stocks tend to perform relatively better in a rising yield environment because wider net interest margins benefit financials. Tech stocks, REITs, and utilities face the most pressure.

Bond Investors

Need to note: Short-term bonds currently offer attractive yields near 4% to 4.5% with relatively low price volatility risk. Most analysts prefer intermediate-term bonds (5 to 10 years), viewing them as the best balance between yield and risk management. Long-term bonds (20 to 30 years) face the greatest price downside risk if yields continue to rise.

Yield-Oriented Investors

Are experiencing the most attractive fixed-income environment in over a decade. The 10-year Treasury yield at 4.6% represents a substantial and tangible fixed income. Investment-grade corporate bonds offer spreads above Treasuries, providing even richer returns. For investors able to hold to maturity, locking in current yield levels is far more attractive than any opportunity available in 2020 or 2021.

Section 5 – Key Developments to Watch

Warsh's first FOMC meeting, June 16-17. This is the most important near-term event. Any statement he makes regarding the policy direction – whether leaning towards tolerating inflation or tightening – will significantly impact both bond and stock markets.

US Inflation Data. Monthly CPI and PCE releases will determine whether rate hike expectations strengthen further. Wholesale prices have already risen 6% in April, indicating upstream pressures have not abated.

US Treasury Bond Auction Results. Weak demand at auctions would signal a persistent supply-demand imbalance, further reinforcing upward pressure on yields.

The 30-Year Yield Approaching 6%. Ian Lyngen, Head of Rates Strategy at BMO, previously stated that if the 30-year yield sustainably holds above 5.25%, it would trigger a "more protracted pullback" in stock valuations. The 30-year yield is currently at 5.2%. Bank of America's consensus target is 6%. The tipping point for a structural re-rating of the stock market is approaching.

Framework for Positioning in the Current Environment:

Stock Investors: Consider a measured rotation from long-duration growth stocks towards value stocks, financials, and sectors with robust current earnings.

Bond Investors: Favor intermediate-term bonds and high-quality investment-grade credit over long-term government bonds.

Yield-Oriented Investors: Current yield levels represent a rare opportunity over the past decade to lock in quality income.

The equity risk premium is near zero. The 30-year yield is at its highest since 2007. A new Fed chair is grappling with inflation. Bond vigilantes have re-emerged. The message from the bond market couldn't be clearer: the era of cheap government borrowing is over. Whether the stock market digests this reality smoothly, or some component eventually breaks, is the central question facing markets in the second half of 2026.

The above investment views are cited from BIT's guest analysts and do not necessarily represent the official position of BIT.

Since the launch of its US stock business in February 2026, BIT (formerly Matrixport) has seen its Assets Under Management (AUM) surpass $200 million. Driven by AI, the US stock market continues to attract global investors. Leveraging over 7 years of institutional service expertise and accumulated regulatory licenses, BIT has successfully bridged the gap between digital assets and traditional finance, helping investors quickly capture investment opportunities.

Data Sources

CNBC, "30-Year Treasury Yield Breaks Above 5.19%, Highest Since Before Financial Crisis," May 19, 2026. CNN Money, "30-Year US Treasury Yield Rises to Highest Since 2007," May 19, 2026. Federal Reserve FRED Database, 10-Year Treasury Constant Maturity Rate, May 18, 2026. TheStreet, Market Daily, May 19, 2026 & May 15, 2026. CNBC, "Kevin Warsh Confirmed as New Federal Reserve Chair," May 13, 2026. Yahoo Finance, "Warsh Confirmed as New Fed Chair Amid Rising Inflation," May 2026. JPMorgan Global Research, "The Next Move for the Fed," April 2026. Fortune Magazine, "The Bond Market is Shouting," May 2026. HeyGotrade, "10-Year Treasury at 4.6%: How Rising Yields Reshape the 2026 Stock Market," May 2026. Mercer Media, "30-Year Treasury Yield Breaks Above 5.1%," May 2026. Allianz Global Investors, Moody's Downgrade Analysis, 2025. Fidelity Investments, US Credit Rating Downgrade, May 2025. Wikipedia, "One Big Beautiful Bill" entry. Price, "The Impact of the US Tax Bill on the Economy and Bond Market," July 2025. Bank of America Asset Management, "The Impact of Rate Changes on the Bond Market," April 2026. Data as of May 19, 2026.

Risk Warning and Disclaimer

The views expressed in this report reflect market analysis as of the report date. Market conditions can change rapidly, and these views may be adjusted without prior notice.
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