Insight Jun: The bullet is loaded and the trigger is ready, whether to fire depends on the Fed's attitude

" A Global Perspective from the Trading Desk, Fu Peng Reviews the Markets "

1. Macro Core Logic: The Return of the Inflation Phantom and the Repricing of US Treasuries

At present, global major asset classes are at a highly sensitive critical turning point, with their core pricing anchor pinned on the US 10-year Treasury yield (US10YT) rebounding from the bottom. From a long-term technical perspective, the US 10-year Treasury yield is currently at the lower support of a multi-year converging triangle. The recent escalation of geopolitical tensions in the Middle East is substantially driving up the prices of key commodities such as crude oil, leading to a strong comeback of “inflation expectations” as the main macro narrative.

 Meanwhile, US labor market data has completely dispelled concerns over a recession. Judging by the latest US initial jobless claims figures (the pink line for 2026 in the chart), the data continues to hover near a low of 213K, demonstrating strong seasonality and structural resilience. The macro combination of “rising inflation expectations + strong labor market” could force the Federal Reserve's policy balance to tilt—most likely shifting its focus once again from “recession prevention” to “inflation fighting.” This fundamental shift in expectations signals a reversal in both interest rates and volumes, which will drive long-end US Treasury yields higher and trigger a repricing across asset classes at a fundamental level.

2. Cross-Asset Transmission and Observation of Critical Points

As US Treasury yields rise, all major asset classes have now approached crucial technical and logical inflection points: