赤字、通胀与新美联储：美债收益率破5%的深层逻辑与市场重置

Key Data: 10-year yield 4.61% to 4.687% · 30-year yield 5.2%, highest since 2007 · S&P 500 down for three consecutive days · Warsh confirmed as new Fed Chair · The "One Big Beautiful Bill" expected to increase deficit by $2.8 trillion · 62% of fund managers expect 30-year yield to hit 6%

Section 1 – What's Happening 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, a one-year high, before rising further to 4.687% on May 19. The 30-year Treasury yield surged to 5.2%, the highest level since 2007. The S&P 500 fell over 1% on May 15 and another 0.67% on May 19, marking its third consecutive losing session. The Nasdaq dropped 0.90%, and the small-cap Russell 2000 index fell 1.33%.

Multiple factors are converging simultaneously. Inflation data exceeded expectations. Wholesale prices rose 6% year-over-year in April, marking the highest upstream inflationary pressure in years. The US debt trajectory continues to deteriorate. A new Fed Chair is inheriting the most complex inflation situation in years. A massive tax cut bill is expected 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 beginning to listen.

Education Note: US Treasury yields represent 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

The 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, the highest upstream inflation reading in years, indicating that price pressures are not just on the consumer side but are propagating upward throughout the supply chain.

Since September 2024, the Federal Reserve has cut interest rates by a cumulative 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 different: the 10-year yield has only fallen by about 35 basis points, while the 30-year yield has actually risen, hitting 5.2%. Mark Malek, Chief Investment Officer at Siebert Financial, stated in a widely circulated article that this divergence is "unprecedented": "Historical data dating back to 1990 shows that such an anomalous disconnect between Fed policy and long-term yields has never occurred before."

Currently, market pricing indicates the probability of a rate hike before December 2026 has risen to 48%, compared to just 14% a week earlier. The probability of a rate cut is below 1%. Bond market expectations are no longer "pausing rate cuts" but are beginning to price in a "return to rate hikes."

Reason 2: New Fed Chair Inherits a Crisis

On May 13, 2026, the US Senate confirmed Kevin Warsh as the new Chair of the Federal Reserve by a vote of 54 to 45, making it the most contentious 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 on the Fed's 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 hold interest rates steady throughout 2026, with the earliest possible rate hike of 25 basis points in the third quarter of 2027. Warsh stated during his confirmation hearing that the Fed needs a "different framework to combat inflation." His first Federal Open Market Committee (FOMC) meeting is scheduled for June 16-17, and every statement made there will move the markets.

Reason 3: The Escalating US Debt Problem

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

Every bond issued must find a willing buyer. When market supply exceeds natural demand, the only mechanism to restore balance is higher yields. The International Monetary Fund has warned that the "safe haven premium" on Treasuries – the additional demand they enjoy as the world's safest asset – is fading. Once this 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, made the tax cuts from Trump's first term permanent 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 become permanent, the Committee for a Responsible Federal Budget estimates the cost could reach $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 strip the US of its top rating. S&P downgraded the US back in 2011, followed by Fitch in 2023. Moody's cited the failure of successive governments to effectively address the persistently rising deficit and interest costs. It projects that by 2035, federal government interest payments will consume 30% of fiscal revenue, up from 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 the end of 1999. The term "bond vigilantes" has returned to market discourse – a concept coined by Wall Street veteran Ed Yardeni in the 1980s to describe traders who punish fiscal profligacy by selling bonds, driving yields higher to force governments to confront their fiscal problems. Today's version of the "bond vigilantes," as Malek notes, employs "a slow, systematic campaign of pressure."

Education Note: A yield curve is a graph showing the relationship between yields on government 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 Impact Stocks

Rising yields pressure the stock market through four distinct channels.

Channel 1: The Discounting Effect

The value of every stock equals 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 increase the discount rate, hitting high-growth tech stocks the hardest because a large portion of their value comes from future earnings expected years from now. 2022 is the best reference: the 10-year yield surged from 1.5% to 4.3%, the Nasdaq fell 33%, and Nvidia was cut in half by over 50%. The vast majority of that loss came from multiple compression, not earnings deterioration. The pace in 2026 is more gradual, but the mechanism is identical.

Channel 2: The Competition Effect and Equity Risk Premium

When risk-free government bonds yield as high as 5.2% on the 30-year, stocks must offer a much higher return to convince investors to take on additional risk. Currently, the earnings yield on the S&P 500 is around 4.2%, while the 10-year Treasury yield is 4.6%. This means investors are actually getting a lower return from stocks than from risk-free government bonds – an unusual and likely unsustainable state. The equity risk premium has been compressed to near zero. Historical patterns suggest this state is eventually resolved by falling stock prices or falling yields. At present, yields are not falling.

Channel 3: The Borrowing Cost Effect

When Treasury yields rise, borrowing costs across the entire economy increase. As of mid-May 2026, the 30-year fixed mortgage rate had 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 eventually transmits to every household and every corporate balance sheet.

Channel 4: The Strong Dollar and International Capital Flow Effect

Rising US yields attract global capital to dollar-denominated assets, pushing up the US dollar exchange rate and creating translation headwinds for 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%, the 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.

Education Note: The equity risk premium is the extra return investors demand from stocks compared 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%, technically making stocks less attractive than bonds. This compressed premium state has historically been a leading indicator for stock market weakness, as capital tends to flow towards assets offering higher yields with lower risk.

Section 4 – Impact on Different Types of Investors

Equity Investors

The environment is more adverse 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, Real Estate Investment Trusts (REITs), and utilities face the most pressure.

Bond Investors

Note: Short-term bonds currently offer attractive yields near 4% to 4.5% with lower price volatility risk. Most analysts prefer intermediate-term bonds with maturities of 5 to 10 years, viewing them as the best balance between yield and risk management. Long-term bonds with 20-to-30-year maturities carry the greatest price downside risk if yields continue to rise.

Income-Oriented Investors

Are experiencing the most attractive fixed-income environment in over a decade. The 10-year Treasury yield at 4.6% provides substantial real fixed income. Investment-grade corporate bonds offer spreads over Treasuries, providing even richer returns. For investors who can hold to maturity, locking in yields at current 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 regarding policy direction – whether tolerating inflation or leaning towards tightening – will have significant implications for both bond and stock markets.

US Inflation Data. Monthly CPI and PCE readings will determine whether rate hike expectations intensify further. April wholesale prices already rose 6%, indicating upstream pressures have not abated.

US Treasury Bond Auction Results. If auction demand is weak, it signals ongoing supply-demand imbalance and will reinforce upward pressure on yields.

30-Year Yield Moving Towards 6%. Ian Lyngen, head of rates at BMO Capital Markets, previously stated that if the 30-year yield consistently holds above 5.25%, it could trigger a "more sustained correction" in stock valuations. The 30-year yield is currently at 5.2%. The consensus target among Bank of America's survey is 6%. The tipping point for a structural valuation reset in stocks is approaching.

Framework for Positioning in the Current Environment:

Equity investors: Consider a moderate 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.

Income investors: Current yield levels represent a rare opportunity to lock in attractive returns not seen in over a decade.

The equity risk premium is near zero. 30-year yields are at their highest since 2007. A new Fed Chair inherits the inflation puzzle. Bond vigilantes are back. The message from the bond market could not be clearer: the era of cheap government borrowing is over. Whether the stock market can digest this reality smoothly, or whether some link in the chain ultimately breaks, will be the central question for markets in the second half of 2026.

The above investment views are cited from BIT's special analyst and do not represent the official stance of BIT.

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

Data Sources

CNBC, "30-Year Treasury Yield Breaks Above 5.19%, Highest Since Before Financial Crisis," May 19, 2026. CNN Business, "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 Day, May 19 and 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, "Next Moves for the Federal Reserve," April 2026. Fortune, "The Bond Market is Shouting," May 2026. HeyGotrade, "10-Year Yield at 4.6%: How Rising Yields Are Reshaping 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 US Tax Legislation on the Economy and Bond Market," July 2025. Bank of America Asset Management, "The Impact of Interest 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 are subject to rapid change, and these views may be adjusted without prior notice.
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