A noteworthy phenomenon has emerged in the financial markets recently: despite the possibility of the Fed lowering interest rates on September 17, the yield on 30-year U.S. Treasuries has risen to 5%. This abnormal trend has puzzled market participants.



Typically, expectations of interest rate cuts lead to a decrease in rates, which in turn drives up bond prices. However, the current market performance contradicts this conventional logic. The main reason for this phenomenon is that the U.S. government has issued up to $200 billion in bonds in just five weeks, leaving the market feeling overwhelmed by such a large supply of bonds and having to raise rates to attract buyers. This means that even if the Fed cuts rates, it will be difficult to rescue the downturn in the bond market.

From a long-term perspective, if the inflation rate remains around 3% over the next decade, the purchasing power of $100 will decline to the equivalent of $75 today, representing a depreciation of 25%. There is a close relationship between U.S. Treasury yields, inflation rates, and fiscal deficits, which makes the operations of traditional financial markets increasingly complex.

In this context, investors are starting to turn their attention to hard assets. Recently, gold prices have been steadily rising, and cryptocurrencies like Bitcoin may also benefit from this as investors are seeking asset classes that can hedge against inflation.

It is worth noting that we should not simply view interest rate cuts as a positive signal. The current market conditions seem to suggest that the traditional financial system is facing severe challenges, and funds may gradually flow into emerging areas such as cryptocurrencies. This trend reflects investors' concerns about the stability of traditional financial markets and their exploration of new asset classes.

In this period of uncertainty, investors need to closely follow market trends and comprehensively assess the risks and opportunities of various assets in order to make informed investment decisions.
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ImpermanentLossFanvip
· 09-03 10:23
Don't leave, BTC, take me with you.
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wagmi_eventuallyvip
· 09-03 09:50
Coin Hoarding during bull run
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OneBlockAtATimevip
· 09-03 02:53
Just buy coins and that's it.
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LiquidityNinjavip
· 09-03 02:53
Who will catch a falling knife for this national debt?
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GateUser-9ad11037vip
· 09-03 02:52
The crypto world is really great~
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WhaleWatchervip
· 09-03 02:52
This interest rate cut can't even save it, tsk tsk.
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BoredApeResistancevip
· 09-03 02:51
The Fed can't play anymore.
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ruggedNotShruggedvip
· 09-03 02:49
It's stable, Bitcoin's spring is coming.
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SquidTeachervip
· 09-03 02:47
Rations are sufficient, let's continue.
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