According to Zhituo Finance APP, due to the tense and uneasy treasury market preparing for the issuance of new government bonds worth 119 billion USD this week, the U.S. 30-Year Treasury Bonds Yield has risen to its highest level since the end of 2023.

The yield on the 30-Year U.S. Treasury Bonds briefly rose by 4 basis points to 4.85%, the highest level since November 2023. On Monday, the U.S. Treasury Department will issue 58 billion USD in three-year government bonds, and on Tuesday and Wednesday, it will auction off 10-year and 30-year government bonds. The auction dates have been moved forward by one day due to the funeral of former President Jimmy Carter on Thursday.

In recent weeks, concerns about the incoming Trump administration reigniting inflation have led the market to evaluate the pressure on U.S. debt. Traders are closely monitoring comments from Trump himself and his representatives regarding their willingness to lower taxes and raise trade tariffs, both of which could spur price increases.

In a report, strategists from Société Générale, including Adam Kurpiel, wrote: "While we think the emergence of bond vigilantes or buyers 'going on strike' is unlikely, we anticipate that the demand for U.S. Treasuries will remain sensitive to economic conditions, geopolitical issues, and risk sentiment." They added that this could lead to increased volatility for the year.

Since early December last year, this sensitivity has pushed the yield on the 10-Year U.S. Treasury Bonds up by about 50 basis points to 4.62%. U.S. Treasuries have almost erased this year's gains, increasing only by 0.6% in 2024.

The impact of rising yields has now spread to other asset classes. Morgan Stanley strategists indicate that interest rates are the "most noteworthy variable" for the stock market in early 2025, recommending that investors select companies with stronger balance sheets or lower leverage that are less sensitive. In the Forex market, sustained high interest rates have bolstered the dollar, which has just recorded its strongest annual gain in nearly a decade.

Bloomberg MLIV strategist Garfield Reynolds stated: "Bond investors may be facing a double whammy from Washington. The smooth passage of large spending plans would bring harm, but political chaos could once again raise concerns about the debt ceiling."

The incoming Trump administration has made it clear that its goal is to implement many key legislative policies as soon as possible. House Speaker Mike Johnson stated last Sunday that a comprehensive bill will be ready, and Trump "will definitely sign it before May," possibly as early as the end of April.

If inflation rises again, it may slow down the Federal Reserve's rate-cutting pace. The Federal Reserve has already lowered its expectations for easing policies in 2025, and the market has fully digested the expectation of only one rate cut this year.

Comments made by Federal Reserve officials over the weekend, including San Francisco Fed President Mary Daly, reinforced this viewpoint.Futures Trading Commission (CFTC)'s latest data shows that investors are significantly reducing their net short positions in US soybean, corn, and wheat contracts, easing bearish sentiment in the market.Officials expect policymakers to keep interest rates steady at least until June.

Additionally, the U.S. debt ceiling showdown is looming, heightening the sense of danger. The U.S. Treasury is preparing to use special accounting maneuvers to avoid default starting mid-January. Given that Trump wishes to raise or eliminate the debt ceiling, this may mark the first stage of a protracted fiscal policy tug-of-war.

Mohit Kumar, Chief Economist at Jefferies International, stated: "The Federal Reserve's hawkish meeting in December, along with concerns over the USA's fiscal situation, has led to upward pressure on interest rates."