#美联储加息预期再起 The Fed's rate hike expectations are reignited! Bond yields soar, and global assets are undergoing a major reshuffle

"Expected rate cuts, so why are they raising interest rates again?" This has been the most confusing question in the global capital markets recently.
Just a few months ago, the market was still immersed in optimistic expectations of "3-4 rate cuts by 2026," with U.S. bond yields steadily declining, the stock market cheering, and gold rebounding strongly. But now, the story has suddenly reversed. The 10-year U.S. Treasury yield has surged from 4.2% to 4.9%, approaching the 5% mark and hitting a new high for the year. The 2-year Treasury yield has even broken through 5.2%, returning to last year's highest levels. The trigger for all this is the recent intensive statements from Federal Reserve officials—from "possible rate cuts this year" to "not ruling out further rate hikes."
Expectations of rate hikes reignite, bond yields soar. What does this mean? It indicates that the benchmark pricing of global assets is being recalibrated, and a silent "big reshuffle" has already begun.
Why have rate hike expectations suddenly reemerged? The shift in the Fed's stance is not out of thin air. There are three realistic driving forces behind it:
First reason: The "tail" of inflation is hard to shake off. The latest CPI data shows that the U.S. core inflation rate has remained around 2.8% for three consecutive months, not only failing to approach the Fed's 2% target but showing signs of "stickiness." Indicators such as services inflation, housing costs, and wage increases—those most reflective of inflation's "intrinsic momentum"—all demonstrate strong resilience. In last week's speech, Fed Chair Powell removed the phrase "further progress" on inflation, replacing it with "a process of inflation moderation has shown signs of reversal." This is not just wordplay—it's the Fed telling the market: inflation isn't under control yet, don't celebrate prematurely.
Second reason: Rising oil prices add fuel to inflation. The escalation in Middle East tensions has pushed international oil prices above $100 per barrel. For the Fed, rising oil prices are the most troublesome issue—they not only directly increase energy costs but also transmit through transportation and production to the overall price level. In the context of rising oil prices, cutting rates? That's like pouring gasoline on the fire. The Fed is well aware of this.
Third reason: Economic data is better than expected. Although many are shouting "recession," U.S. economic data doesn't cooperate. Non-farm employment has exceeded expectations for consecutive months, the unemployment rate remains at historic lows, and consumer spending remains strong. The economy's "resilience" means the Fed doesn't need to cut rates to "rescue the market"—giving them confidence to maintain high interest rates. These three factors combined force the market to reprice: the previously expected "soft landing + rapid rate cuts" script may have already been torn up.
How does the surge in bond yields trigger a "big reshuffle"?
Many people think "U.S. bond yields" are something far across the ocean and unrelated to them. But in fact, they are the "benchmark" for global asset pricing. When this benchmark moves sharply, all assets will shake accordingly.
First, stock market valuations are compressed. In stock valuation models, there is a core variable—discount rate. When the risk-free rate (U.S. bond yield) rises, the present value of future cash flows decreases. For overvalued growth stocks, this impact is most intense. Over the past month, the Nasdaq has fallen more than 5%, the ChiNext index in China has dropped over 4%, and the Hang Seng Tech Index has declined over 7%. This isn't because company fundamentals have deteriorated—it's because the "pricing formula" has changed.
Second, the dollar strengthens, putting pressure on emerging markets. Rising U.S. bond yields usually lead to a stronger dollar. Over the past month, the dollar index has risen from 105 to 109. For emerging markets, a stronger dollar means two pressures: one, local currency depreciation; two, capital outflows. The recent significant outflow of northbound funds from the Chinese A-shares market reflects this logic.
Third, the "glow" of gold is overshadowed. Gold doesn't generate interest, and its opportunity cost is the yield of U.S. bonds. When bond yields rise from 4% to 5%, the opportunity cost of holding gold increases significantly. This is one of the core reasons why, after the Middle East conflict escalated, gold didn't rise but fell instead.
Fourth, the "party" of cryptocurrencies is halted. In a low-interest environment, cryptocurrencies like Bitcoin are viewed as "digital gold" and risk assets. But after bond yields soar, the appeal of these "interest-free assets" is also weakened. Bitcoin's retreat from $52,000 to below $48,000 is a prime example.
What kind of "big reshuffle" is the global asset market experiencing?
The so-called "big reshuffle" refers to the redistribution of funds among different asset classes. Currently, this reshuffle path is very clear:
Funds are flowing from "overvalued growth stocks" to "value stocks and high-dividend stocks."
Over the past decade, the low-interest environment made growth stocks the biggest winners. But as interest rates stay high and valuations compress, funds are starting to seek assets that "aren't afraid of high rates"—companies with stable cash flows, reasonable valuations, and attractive dividend yields.
Funds are moving from "emerging markets" to "dollar assets." A 5% risk-free return is highly attractive to global capital. Assets like dollar deposits, U.S. bonds, and money market funds are absorbing funds flowing out of emerging markets. In the short term, Chinese A-shares, Hong Kong stocks, and other emerging markets face capital outflows.
Funds are shifting from "interest-free assets" to "interest-bearing assets." Gold, Bitcoin, and other interest-free assets are at a disadvantage in a high-interest environment. Conversely, bonds, high-yield savings, and high-dividend stocks that can provide cash returns are regaining favor.
Conclusion
This is not the end of the world but a turning point of an era—the asset prices driven up by "money printing" are being washed away by the tide of high interest rates; assets with solid fundamentals and cash flow backing are regaining their pricing power.
For ordinary investors, this isn't about "whether to run" but "where to run." In this big reshuffle, those who survive are not the smartest but the clearest—those who understand the direction of interest rates, grasp asset logic, and can control their emotions.
The reshuffle is ongoing—are you ready?