The Fed's tightening expectations warming up is actually good for the domestic bond market, with the 10-year government bond at 1.70% becoming a key support level. Under the risk-averse capital flow logic, long-term interest rates have support, waiting for a domestic incremental signal to break the deadlock.

CITIC Securities stated that the probability of the Federal Reserve raising interest rates in the short term remains low, and market concerns mainly stem from sticky inflation and strong employment.
CME data shows that overseas rate hike expectations may begin around late October 2026.
Global liquidity tightening and market adjustments are early reactions to the Fed's rate hike expectations in the fourth quarter.
Regarding the domestic bond market, the increased expectation of Fed tightening is not necessarily bearish; the domestic bond market is relatively independent and may attract funds due to overseas liquidity tightening and equity market adjustments, supporting long-term interest rates.
The 10-year government bond is expected to fluctuate around 1.70%, and a break below 1.70% will require waiting for domestic incremental information.