news flash·2025-05-23 00:28Core Viewpoint - The recent rise in long-term U.S. Treasury yields is driven by concerns over deficits linked to Trump's tax reform, leading to a narrative of "Bond Vigilantes" [1] Group 1: Market Analysis - Demand for the 20-year U.S. Treasury auction was weak, but not the worst, with a bid-to-cover ratio exceeding 5%, attracting market attention [1] - Moody's downgrade of the U.S. sovereign credit rating has exacerbated market sentiment, but its practical significance is limited and not a core concern for the market [1] - The prevailing market sentiment is bearish on U.S. Treasuries, with long-term yields likely to rise in the short term, although this may change if negative factors are fully priced in [1] Group 2: Economic Implications - The "Bond Vigilantes" narrative may provide an opportunity for Trump to argue that the "One Big Beautiful Bill" can stimulate economic growth and address debt issues [1] - If U.S. economic data weakens and fiscal trajectories do not improve, long-term Treasuries may face increased selling pressure [1] - Future attention should be given to potential inflation rebounds and the release of Treasury supply following the resolution of the debt ceiling, which could drive yields higher [1]