A Macroeconomic Assessment of the Current Economy

Taking the 30-year US Treasury yield breaking through 5.2% as a signal.

The 30-year US Treasury yield surging past 5.2% is the result of the market's assessment that the Federal Reserve is bound to raise interest rates, that inflation will continue to climb, and that the government debt trap is unsolvable.

When the value of the US Treasuries in one's hands cannot be guaranteed, why waste time and opportunity costs? Voting with one's feet is the best choice.

Furthermore, according to the Kondratiev wave theory, after experiencing the prosperity of globalization, the world economy is bound to enter a macro-cycle of long-term recession, weakened collaboration, and intensified nationalist narratives and confrontations.

As for bypassing the recession period entirely through a technological explosion—namely, the development of the artificial intelligence industry—this is impossible from both a historical and a philosophical perspective. In my view, it is purely whimsical, a final fantasy born of wishful thinking.

The market's continuous sell-off of 30-year US Treasuries indicates a lack of optimism regarding the long-term, overarching trend.

The Iran issue will not simply be shelved and resolved; rather, there will be further developments. These developments will certainly not be optimistic.

Logic Chain 1: Yields rise ➔ Capital flows back into US Treasuries ➔ Market liquidity dries up ➔ The real economy and corporate financing face difficulties ➔ Asset prices (stock market/real estate) fall ➔ Companies lay off workers and cut salaries ➔ Deflation and economic crisis.

Logic Chain 2: Federal Reserve hikes rates ➔ Benchmark deposit and lending rates soar ➔ Capital is withdrawn from investment markets and returns to banks ➔ Valuations of stocks/crypto assets plummet ➔ Corporate debt interest surges and financing is cut off ➔ Companies halt expansion, lay off workers, and cut salaries ➔ Household mortgage pressure spikes and consumption shrinks ➔ Total market demand freezes ➔ Inflation falls and economic recession begins.