The yield on US Treasury bonds has fallen to 4.04%, and I am beginning to worry about the market outlook.

I recently took a glance at the US Treasury market and found that the 10-year Treasury yield has fallen to 4.04%, down 0.30 percentage points from a month ago. As an old stock trader, I can't help but sneer – although this yield is still relatively high from a historical perspective, the trend is truly unsettling!

I remember at the beginning of the year I was still worried about investment strategies in a high interest rate environment, but now yields are falling all the way down, leaving me confused about the direction of the market. To be honest, the economic data may be much worse than it appears on the surface. The Federal Reserve is very likely to continue cutting interest rates, but can this really save the economy? I am skeptical about this.

Whenever there is such a significant decline in yields, it usually signals an increase in the risk of economic recession. I remember back in 1981, the yield on U.S. Treasury bonds reached an astonishing 15.82%. Now look at today, barely above 4%, the market is really not what it used to be!

Many large traders are frantically buying government bonds, and these individuals usually sense market trends earlier than ordinary investors. While some predict that yields will hover around 4% in the next 12 months, I don't believe this official statement.

I clearly feel that the global demand for U.S. Treasury bonds is weakening, and the proportion held by foreign holders is decreasing. Haven't we in China already reduced our holdings of U.S. Treasury bonds by about $200 billion? This trend will only continue.

The recent decline in yields reflects investors' concerns about the economic outlook and exposes potential structural issues in the U.S. Treasury market. If you ask me what comes next, I can only say - fasten your seatbelt, the market turbulence has only just begun!