According to Woofun AI, veteran strategist Harry Bassman has issued a core warning that if the 20-year U.S. Treasury bond yield touches the 6%警戒 line, market mechanisms will trigger violent turbulence.
A report released on October 13 pointed out that the current 20-year bond yield is about 5.68%, just 0.32 percentage points away from that critical threshold.
Data compiled by Woofun AI shows that among Treasury futures contracts worth about $200 billion, sellers tend to deliver longer-duration bonds to reduce costs, but this would cause bond values to fall further as interest rates rise.
Fund managers may increase selling or hedging to control risk exposure. Bassman estimates that this shift in delivery methods is equivalent to auctioning $110 billion of 20-year bonds within four months. Although it is not the actual sales amount, it reflects enormous potential market pressure and could create a "nightmare scenario."
This pressure will be transmitted directly to the stock and cryptocurrency markets.
Higher Treasury yields push up corporate borrowing costs, especially weighing on highly valued technology stocks.
A Bank of America (BAC.US) survey noted that when the 10-year Treasury yield reaches 5.9%, funds will tend to flow into bonds rather than stocks, while on Tuesday that yield was only 5.22%.
At the same time, Bitcoin traded at around $83,014 on Tuesday. Bitunix has attributed the recent weakness in the crypto market to rising U.S. borrowing costs, as climbing yields are drawing investors away from high-risk assets.
Although the above threshold will not necessarily lead to a market crash, a rapid rise in yields could cause shocks before that level is reached.
Bassman stressed that Washington's fiscal deficit of as high as 6.2% is the deeper root cause. This is not simply an inflation problem, but a serious "trust" problem.
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