The latest CPI report shows an inflation rate exceeding market expectations, bringing dual pressure to the US Treasury market, leading to decreased demand for US Treasuries among investors and exacerbating concerns about interest rate trends.

It is estimated that the Federal Reserve may maintain interest rates at historic highs for several years, further stimulating market unease. Reports indicate that the yield on the US 10-year Treasury bond has recently risen to 4.5%, nearing last October's peak of 5%.

Massive bond issuances and market reactions: The US government plans to issue approximately $386 billion in bonds in May, with the market adopting a cautious stance. Faced with sustained high issuance volumes, investors express concerns about the future absorption capacity of bonds. Particularly evident in recent auctions of 10-year and 30-year bonds, the subdued demand highlights market apprehensions.

Short-term bond strategies and the role of the Federal Reserve: To alleviate financing pressures, the US Treasury has shifted issuance focus to short-term bonds. According to the latest Federal Reserve meeting minutes, there may be a slowdown in the pace of balance sheet reduction in the future to ease pressure on the Treasury market.

Potential support from global investors: Despite challenges facing the US Treasury market, it remains attractive to international investors seeking higher yields. Particularly for investors from major economies such as Japan and the Eurozone, the relative safety and higher returns of US dollar assets may be valued. This trend could provide some support for US Treasuries.

As inflation and interest rates fluctuate, investors need to closely monitor market dynamics and adopt appropriate investment strategies to address uncertainty and risk. For participants in financial markets, a deep understanding of trends in the Treasury market and related policies is crucial for making prudent investment decisions.