Deep Topics - The article highlights the "blind spot" in the bond market, warning of the "high volatility" trap in a low-interest-rate environment, where adjustments can occur within 1-2 months, leading to changes of 50-100 basis points [4][6]. - It emphasizes the need for coordinated fiscal and monetary policies to focus on structural investment opportunities, suggesting that such collaboration can enhance economic resilience [6][8]. Hot Topics - The outlook for the U.S. labor market in 2026 is discussed, questioning whether the trend of "jobless growth" will continue [11]. - The Political Bureau meeting aims to achieve a good start for the "15th Five-Year Plan," focusing on balancing economic work and trade struggles while emphasizing the effectiveness of policies [13][16]. - Economic indicators show a rebound in exports and a strengthening CPI, raising questions about the overall economic performance in terms of volume and price [15][19]. - The Central Economic Work Conference outlines ten highlights, including the need for a proactive fiscal policy, increasing fiscal deficit rates, and supporting key areas through enhanced government spending [16][18].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Overseas experience shows that a low - interest - rate environment is not a "safe haven" for low bond - market volatility. Bond market adjustments in low - interest - rate environments are often rapid and significant, and bond convexity amplifies market volatility [4][82]. - The "homogeneous strategies" and crowded trading behaviors of institutions in a low - interest - rate environment are the micro - foundations of bond - market vulnerability. Reversals in macro - fundamental expectations can trigger sharp bond - market declines, and the "stock - bond seesaw" due to rising risk appetite exacerbates market adjustments [82]. - In 2026, the economy is expected to shift from "confidence building" to an "atypical" recovery. The process of capital "rebalancing" during nominal GDP repair may increase bond - market volatility [6][82]. Summary by Relevant Catalogs Overseas Experience "Mirror"? "Low - Interest - Rate" Environment, May Not Be a "Safe Haven" for Volatility - Low - interest - rate environments are not synonymous with low bond - market volatility. For example, after 1990, the rule that "lower interest rates lead to narrower volatility" in US Treasuries failed. In other developed economies, bond - market volatility did not converge as interest rates declined from 2% to 1% [4][12]. - Bond - market adjustments in low - interest - rate environments are large in amplitude, fast in speed, and often accompanied by rising term premiums. The average adjustment amplitudes in the US, Germany, France, and Japan are 81bp, 53bp, 59bp, and 74bp respectively. The adjustment usually occurs within 1 - 2 months [4][20]. - Bond convexity magnifies market volatility in low - interest - rate environments. As interest rates fall, bond duration lengthens non - linearly, increasing price sensitivity. A 50bp yield increase in 30 - year Treasuries at a 1% interest rate leads to a price decline 1.7 times that at a 5% interest rate [4][25]. Behind the "High - Volatility" Trap? Extreme Deduction of Consensus Expectations, Backlash under Changing Macro - Environments - In low - interest - rate environments, institutional "homogeneous strategies" and crowded trading are the micro - foundations of bond - market vulnerability. For example, US life - insurance institutions increased their allocation of bonds with a duration of over 10 years by 6.3% from 2008 - 2015, and trading institutions tend to increase leverage [30][82]. - Reversals in macro - fundamental expectations are the direct cause of high bond - market volatility. High bond - market volatility in low - interest - rate eras does not require actual tightening of monetary policy; "less - than - expected rate cuts" or "slightly increased rate - hike expectations" can trigger rapid bond - market adjustments. Nominal GDP repair is an important inducement for high volatility [38][82]. - Capital "rebalancing" under changing macro - environments is an important catalyst for increased bond - market volatility. During low - interest - rate periods, 9 times when US Treasury yields rebounded by over 50bp, the S&P 500 rose, and 7 times when Japanese Treasury yields rebounded, the Nikkei 225 rose by an average of 9.7% [46][82]. Current "Reflection"? In the "Atypical" Recovery of 2026, Be Wary of the Bond - Market's "High - Volatility" Trap - In 2026, the economy is expected to experience an "atypical" recovery. Domestically, expanding domestic demand policies and debt reduction will boost consumption and investment. Externally, export resilience will remain strong. Inflation will improve, and monetary policy will be more cautious about rate cuts [6][60]. - Historical experience shows that nominal GDP repair often leads to capital "rebalancing" and a "strong - stock, weak - bond" pattern. Currently, the difference between the 10 - year Treasury yield and the all - A dividend yield is still below 0%, and the proportion of public - fund stock allocation is relatively low [6][65]. - The domestic bond market may have insufficient awareness of the "high - volatility" trap in low - interest - rate environments. With the record - high wealth - management scale and large - scale excess savings, the capital "rebalancing" process when large - scale deposits mature may increase bond - market volatility [70][82].