Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The current inflation is likely to recover moderately, and the probability of the bond market turning bearish due to "anti-involution" is low [2][26] - Funds are expected to remain abundant for a long time, and the probability of the 10-year Treasury yield continuing to adjust above 1.75% is low. However, if it drops to the range of 1.6% - 1.65%, the bond market may face capital constraints [2][7] - In the second half of the year, the fundamentals may gradually become the unexpected main line of the bond market and may be beneficial to the bond market. It is recommended to allocate when the 10-year Treasury yield is above 1.7% [2][7] Summary by Related Catalogs Bond Market Facing Adjustment Pressure - After experiencing significant fluctuations, rapid upswings, and rapid downswings, the bond market is facing adjustment pressure again. Since August, the bond market has been under obvious pressure, and there are still significant differences between the bulls and bears in the market [5][11] How the Bulls and Bears View the Impact of "Anti-Involution" on the Bond Market - **Bulls**: The "anti-involution" policy will be implemented in the context of high-quality development. The probability of re - introducing large - scale demand - stimulus policies is low. The impact on inflation and the bond market needs to be observed [7][14] - **Bears**: Even if the probability of short - term demand - side policies is low, rapid capacity restrictions can cause price increases. A small price recovery can trigger bond market adjustments, and subsequent price factors may be negative for the bond market [7][23] - **Our View**: "Anti-involution" has raised inflation expectations, but the inflation is likely to recover moderately, and the probability of the bond market turning bearish is low [7][26] How the Bulls and Bears View the Impact of Monetary Policy on the Bond Market - **Bulls**: In the second half of the year, the economy still faces pressure, and liquidity is likely to remain abundant. The restart of Treasury bond trading in the fourth quarter will directly benefit the bond market [7][27] - **Bears**: The moderate monetary easing has been reflected in bond prices. The bottom line of further easing is "fund idling." The central bank's interest rate cut and reserve requirement ratio cut space is limited this year, and the impact of subsequent Treasury bond trading on the bond market will be similar to that of repurchase [7][29] - **Our View**: Funds are expected to remain abundant for a long time, and the probability of the 10-year Treasury yield continuing to adjust above 1.75% is low. However, if it drops to 1.6% - 1.65%, the bond market may face capital constraints [7][34] How the Bulls and Bears View the Impact of Economic Fundamentals on the Bond Market - **Bulls**: The pricing power of fundamentals on the bond market has been weak, but attention should be paid to the downward pressure on fundamentals under the background of high real interest rates. Fundamentals may become the unexpected main line of the bond market in the next stage [7][35] - **Bears**: Treasury yields have priced in the pressure on fundamentals, and the bond market is not very sensitive to fundamental changes [7][45] - **Our View**: In the second half of the year, the pricing power of fundamentals on the bond market may increase marginally, and it may gradually become the unexpected main line of the bond market, which may be beneficial to the bond market [7][47]