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

"Expected rate cuts, why are they raising rates again?" This has been the most confusing question in recent global capital markets.
Just a few months ago, the market was still immersed in optimistic expectations of "3-4 rate cuts by 2026," with U.S. Treasury yields steadily declining, stock markets cheering, and gold rebounding strongly. But now, the plot 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—shifting from "possible rate cuts this year" to "not ruling out further rate hikes."

The expectation of rate hikes is reignited, and bond yields are soaring. 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 has the rate hike expectation suddenly reemerged? The shift in the Fed's stance is not arbitrary. There are three realistic drivers behind it:
First: The "tail" of inflation cannot be shaken off. The latest CPI data shows that the core inflation rate in the U.S. 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: Rising oil prices add fuel to inflation. The escalation of 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, production, and other links 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: Economic data is better than expected. Although many are calling for a recession, U.S. economic data does not cooperate. Non-farm employment has exceeded expectations for consecutive months, unemployment 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 themselves. 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 down over 4%, and the Hang Seng Tech Index over 7%. This isn't due to deteriorating company fundamentals but 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: first, local currency depreciation; second, capital outflows. The recent large outflow of northbound funds from A-shares 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" in cryptocurrencies is halted. Bitcoin and other cryptocurrencies are viewed as "digital gold" and risk assets in a low-interest environment. 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 global asset markets experiencing?
The so-called "big reshuffle" refers to the redistribution of funds across different asset classes. Currently, this reshuffle path is very clear:

Funds are moving from "overvalued growth stocks" to "value stocks and high-dividend stocks."
Over the past decade, the low-interest-rate environment made growth stocks the biggest winners. But as interest rates stay high and valuations compress, funds are starting to seek assets that are "not afraid of high interest rates"—companies with stable cash flows, reasonable valuations, and attractive dividend yields.

Funds are shifting from "emerging markets" to "dollar assets." A 5% risk-free return is highly attractive to global capital. Assets like dollar deposits, U.S. Treasuries, and money market funds are absorbing funds flowing out of emerging markets. In the short term, A-shares, Hong Kong stocks, and other emerging market equities face capital outflows.
Funds are moving from "interest-free assets" to "interest-bearing assets." Gold, Bitcoin, and other interest-free assets are at a disadvantage in a high-interest-rate 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, survival isn't about being the smartest but about being the clearest—those who see through the interest rate trends, understand asset logic, and can control their emotions.
The reshuffle is ongoing—are you ready?