US Treasuries Under Pressure: A Tailwind for Gold and BTC
The US Treasury market is facing increasing pressure due to inflation risks, persistent fiscal supply expansion, and the growing demand for funds by AI infrastructure. The yield on the 10-year U.S. Treasury recently touched around 4.70%, close to a twenty-year high.
The Treasury has stated it will at least double the upper limit of liquidity support repurchase operations to suppress the long end, but yields briefly fell and could not hold. This indicates that the underlying supply and inflation issues cannot be resolved with a few billion dollars in repurchases.
Inflation concerns are exacerbated by the Iran war, which drives up oil prices, cost pressures, and may suppress real growth and tax revenues. The demand for funds by AI infrastructure has begun to spill over into the bond market, competing with the Treasury for capital.