On August 18, global financial markets experienced significant volatility as the yield on 30-year US Treasury bonds surged to a new 19-year high since 2007, thoroughly reshaping the pricing system for global long-term assets. The sharp spike in long-term Treasury yields is mainly driven by persistently high US fiscal deficits, rising inflation expectations triggered by Middle East geopolitical risks, and intensified market concerns about the runaway scale of US long-term debt.

Official data shows that the annual US fiscal deficit is approaching 2 trillion US dollars. Continuous large-scale government bond issuance has led to a severe oversupply of US treasury bonds. Coupled with energy inflation pressure from rebounding crude oil prices, market risk pricing for long-term dollar assets keeps rising. Different from the stable short-term interest rates, the continuous surge in long-term interest rates steepens the US Treasury yield curve, reflecting market pessimism about America’s long-term economic fundamentals, inflation stickiness and debt risks, rather than short-term monetary policy fluctuations.

Financial institutions pointed out that long-term US Treasury yields serve as the core pricing anchor for global real estate, long-term equity assets and cross-border fixed-income products. The record-high yield will continuously raise the investment cost of global long-term assets and suppress the valuation of global growth stocks and long-term assets in emerging markets.

Meanwhile, the US dollar index has declined for three consecutive days and offshore RMB continues to appreciate, forming a special market pattern of rising long-term bond yields and weakening US dollar. The rebalancing of global capital is accelerating, and the logic of global medium and long-term asset allocation is undergoing comprehensive adjustment, bringing profound changes to global financial market operation trends.