Core Viewpoint - The rising U.S. Treasury yields over the past three years have increased the pressure of cross-border capital outflows from China, impacting the foreign exchange, bond, and stock markets to varying degrees, with the foreign exchange market facing the most pressure. However, the overall impact is manageable due to the limited scale of foreign investment in domestic financial assets [2]. Group 1: U.S. Treasury Market Dynamics - The U.S. Treasury market's status as a global safe asset is supported by the U.S.'s economic and military dominance, the dollar's status as a global currency, and the market's depth and liquidity. While these factors are unlikely to change fundamentally in the short term, variables such as deteriorating fiscal sustainability and geopolitical conflicts are increasing market instability [2][4]. - The demand side for U.S. Treasury investments is influenced by economic growth, inflation expectations, monetary policy, geopolitical factors, and globalization. Financial institutions' trading behaviors can amplify demand fluctuations [6]. Group 2: Supply Side Factors - The supply of U.S. Treasuries is determined by fiscal deficits and existing debt levels, with economic growth, demographics, income inequality, and interest payments affecting the fiscal deficit. Economic slowdowns can reduce fiscal revenues, while an aging population increases social security and healthcare spending burdens [7]. - Historical analysis of U.S. Treasury yields shows distinct phases: - 1965-1982: High inflation phase with yields peaking at 15.8% due to economic growth and oil crises [7]. - 1983-2007: A period of low yields driven by moderate economic growth and increased foreign investment [7]. - 2008-2021: A low growth and low inflation phase where yields fell to historic lows due to quantitative easing and demographic changes [7].