US Treasury Bomb Shock

● Unbelievable strikes again

Analysis of Today’s US-China Trade Issues and Market Volatility

Market Situation Overview

The Nasdaq index fell by 4%, and the Dow, S&P 500, and Russell indices also fell by 2% to 4%.
The overall market fell more than -6% in the morning, then briefly rebounded in the middle thanks to Trump’s remarks.
This volatility is causing anxiety among investors, significantly impacting the stock market, interest rate fluctuations, and economic prospects.

US-China Trade Conflict and Tariff Policy

As the trade war between the US and China intensified, news of tariff increases stimulated investment sentiment.
The US applied a 34% reciprocal tariff on China, and although it was thought that an additional tariff of 125% would be applied, the total tariff rate was eventually announced to be 145%.
In addition to Chinese products, tariffs of 25%, and in some cases 5%, are imposed on major items such as steel, aluminum, automobiles, and auto parts.
The US is applying tariffs of 10% or 25% on imports from countries outside the USMCA agreement.
In this process, controversies related to US-China trade, Trump’s policies, and economic prospects continue.

Analysis of Inflation Indicators and Economic Indicators

The latest Consumer Price Index (CPI) announcement was lower than expected, indicating that inflationary pressures have greatly eased.
In particular, core service indicators excluding housing costs also recorded a downward trend.
However, the price stabilization effect may only be a short-term rebound in a situation where tariff increases and US-China trade conflicts exacerbate market instability.
These indicators are affecting the stock market, interest rate fluctuations, and economic prospects in various ways.

Trump’s Policies and Market Reaction

President Trump’s remarks brought a short-term rebound to the market, but unpredictable policies, such as changing his words, are fueling the downward trend again.
Trump showed a willingness to recover the economy through a trade deal with China, but at the same time, he hinted at the possibility of extending tariffs and imposing additional tariffs.
Moderates, such as Treasury Secretary Scott Besent, took the lead and issued a 90-day tariff postponement, but a similar pattern to the first term is being repeated.
Investors are considering selling assets in response to economic prospects, US-China trade, and changes in Trump’s policies.

Global Economic Outlook and Risk Factors

The US’s extreme trade policies and tariff increases are causing tensions with other countries, while China is responding by negotiating the elimination of electric vehicle tariffs.
Major institutions such as the Wall Street Journal and KB Securities predict that the highly volatile box-range situation will continue, suggesting that similar patterns may appear as in Trump’s first term.
Hedge fund founders like Ray Dalio warn that the US is likely to fall into recession, mentioning that a change in the monetary order and a plunge in Treasury bond prices could lead to a different phase from a typical recession.
All of these issues are directly related to key economic keywords such as economic prospects, US-China trade, Trump’s policies, the stock market, and interest rate fluctuations, requiring close attention to future market movements.

< Summary >
Today, the market showed an unstable appearance with major stock indices such as Nasdaq plummeting.
As the tariff war between the US and China intensifies, the total tariff rate has been announced to be 145%, escalating trade conflicts.
President Trump's unstable remarks and policy changes have brought a short-term rebound but are simultaneously increasing long-term uncertainty.
Despite the decline in the Consumer Price Index and core service indicators, risks remain in US-China trade and tariff issues, as well as in the overall global economy.
Investors are paying attention to key issues such as economic prospects, US-China trade, and Trump's policies, requiring a prudent response.

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● Treasury-Armageddon

Global Economic Breaking News: Rapidly Changing U.S. Treasury Yields, Hedge Funds, and Analysis of Trump’s Influence

1. Market Volatility and Rising U.S. Treasury Yields

Recently, the 30-year U.S. Treasury yield has surged.
The Nasdaq index rebounded after a 6.4% drop, but the market is still uncertain for tomorrow morning.
A decline in Treasury prices means a rise in bond yields, influenced by various factors.

2. Causes and Outlook for Rising Bond Yields

Bond yields rise when the economy improves due to increased demand for borrowing.
Despite Trump-related comments and receding recession fears, bond yields are rising again.
Safe-haven demand and inflation concerns are also major drivers of rising yields.
Overall, there is a coexistence of economic recovery expectations and anxiety, increasing risks related to bonds and inflation.

3. Hedge Funds and Basis Trade Techniques

Basis trade, where hedge funds repeatedly engage in leveraged transactions using U.S. Treasuries as collateral, is a key strategy.
Hedge funds buy Treasuries and then borrow against them to purchase more Treasuries, profiting from the spread.
They aim for large profits through leverage even with small gains, but face the risk of massive losses if international interest rates rise or a liquidity crisis occurs.
This trading method can significantly impact the entire U.S. Treasury market (approximately $25 trillion).

4. The Roles of China and the Federal Reserve, and the Impact of a Weak Dollar

A weak dollar has led to large-scale dollar selling by other countries.
China is reducing its holdings of U.S. Treasuries, but it should be noted that it is not yet a reckless mass sell-off.
The Federal Reserve has been reducing its Treasury holdings, but may step in to buy more if market instability increases.
This situation could contribute to inflation and financial instability.

5. Trump’s Influence and Structural Problems in the Financial Market

Trump has experienced multiple bankruptcies through his past business strategies and is currently raising concerns about U.S. Treasuries.
Along with Treasury issues, the leverage risk in the financial system triggered by hedge fund trading methods is emerging.
Trump’s statements and policies amplify financial market instability, ultimately intertwining with structural problems in the financial sector to cause significant repercussions.
Additionally, if hedge funds continue to use U.S. Treasuries as leveraged investment products, the possibility of a financial crisis should be closely monitored.

Summary

The 30-year U.S. Treasury yield has recently surged.
Reasons for rising bond yields include a strong economy, Trump-related uncertainties, and inflation concerns.
Hedge funds are using Treasuries as leveraged investment products through basis trade, raising concerns about financial market shocks.
The actions of China and the Federal Reserve, along with a weak dollar, are also contributing to financial instability.
Trump’s influence and past business strategies, combined with structural risks in the financial market, could cause significant repercussions.
This article provides a detailed explanation of the latest market conditions and structural issues, focusing on key SEO keywords such as Treasuries, hedge funds, inflation, the Federal Reserve, and Trump.

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