U.S. Treasuries Break 5%, Global Markets Enter the “High Interest Rate New Normal”—What Is This Sell-Off Really Trading? Today, the dominant theme in global capital markets is crystal clear: it’s not about any single stock failing—it’s about the repricing of risk-free rates. The 10-year U.S. Treasury yield has surpassed 5.11%, hitting its highest level since 2007; the 30-year yield has returned to levels last seen in 2004. The bond market is sending the most direct message possible: money is no longer cheap. On the surface, rising oil prices (Brent crude above $105) combined with strong PMI data have reignited inflation concerns. Deeper down, markets are beginning to believe: the U.S. economy isn’t weakening—it’s accelerating. There’s no compelling reason for the Fed to pivot immediately. The probability of a rate hike in October has now surged to around 70%. The result? A classic “stocks and bonds sell-off”: - Growth and tech stocks feel the earliest pressure (most sensitive to interest rates) - Utilities, REITs, and highly leveraged companies are similarly hit - Energy emerges as one of the few beneficiaries This resembles 2022, but the context is fundamentally different. Then, it was “out-of-control inflation + imminent recession.” Now, it’s “stronger-than-expected economy + persistent inflation + ongoing fiscal expansion.” Bond investors are demanding significantly higher term premiums—not just a fleeting sentiment shift, but a full repricing of long-term fiscal trajectories. The meeting between Trump and Xi provided temporary sentiment relief—trade truce extended by two months, with rare earths and tariffs暂不升级. But this cannot offset the fundamental pressure from rising rates. What markets are truly trading is this: if the 10-year U.S. Treasury yield stabilizes above 5%, the fair valuation floor for equities must decline. For investors, today’s most critical question isn’t whether the market will rebound tomorrow—it’s to reassess three things: 1. How much of your portfolio relies on low rates to justify its story? 2. Are you overexposed to a few AI leaders while ignoring risks in rate-sensitive sectors? 3. Has the value proposition of cash and short-term bonds been significantly underestimated? High rates aren’t an apocalypse—but they will change how you make money. The past few years’ logic—“buy and hold growth stocks and you’ll win”—is being replaced by: “who can still generate free cash flow under a higher discount rate?” A-share markets also adjusted ahead of the holiday, with declining volume—a normal reaction to lower risk appetite, not an independent collapse. What truly warrants caution: if U.S. Treasury yields continue climbing toward 5.2–5.3%, pressure on global risk assets won’t end in a single day. Markets will always offer rallies—but the quality of those rallies depends on whether rates truly stabilize.