The US Fixed Income Weekly

This week's message is that the global bond selloff may be approaching a tactical inflection point, even though the secular backdrop still points to higher long-term yields. Strong nominal activity, sticky inflation, persistent fiscal deficits, and AI-driven investment continue to pressure real yields and term premium. The Fed faces an uncomfortable choice between further tightening and allowing long-end yields to tighten financial conditions. While the core rates view remains "stronger, higher, steeper," technical indicators suggest the 10-year Treasury yield may be near a tactical peak after reaching 5.36%, with scope to retrace toward 5.0% before the longer-term uptrend resumes. Corporate credit weakness still appears primarily rates-driven rather than fundamental;