U.S. Treasury markets are flashing warning signals as yields surge across the curve, with the 10-year term premium exceeding 50 basis points for the first time in a decade. This shift reflects deepening investor concerns about long-term inflation, growing debt supply, and uncertainty around future monetary policy. Recent economic indicators, including accelerating service sector activity and stronger-than-expected job openings, have dampened expectations for Fed rate cuts, with markets now pricing in fewer cuts for 2024. The bond market tension has global implications, lifting borrowing costs worldwide, strengthening the dollar, and contributing to market volatility as investors grapple with the uncertain policy environment.
