Report Industry Investment Rating - The investment rating for the industry is "Underperform the Market" [1][4] Core Viewpoints - The U.S. Treasury market is caught in a fierce game between geopolitical risk premiums and data dependence. The market's pricing logic has reversed from narrowing rate - cut expectations to a panic about rate hikes. The interest rate futures market has completely ruled out the possibility of rate cuts this year and started to price in the probability of one rate hike by the Fed in 2026 [1] - Under the dual pressure of inflation return and geopolitical risks, the yields of U.S. Treasuries have risen across the board, and the global bond market has declined in resonance. The U.S. Treasury yield curve shows a bear - steepening characteristic, and the market volatility has increased significantly [2] - Facing the resurgence of core inflation pressure, the Fed may have to abandon the plan of rate cuts this year and may even restart rate hikes in extreme cases. The market expects the Fed to maintain high interest rates for a longer time than previously expected [2] - In the future, the market situation will highly depend on the evolution of the Middle East geopolitical conflict and the trend of inflation data. It is recommended to adopt a dumbbell - shaped defensive strategy [3] Summary by Relevant Catalogs U.S. Treasury Benchmark Interest Rate - The yields of 2 - year and 10 - year U.S. Treasuries, the U.S. Treasury yield curve, the bid - to - cover ratios of U.S. Treasuries of various maturities, the winning bid rates of 2 - 30 - year U.S. Treasury issuances, the monthly issuance volume of U.S. Treasuries, and the implied rate - hike/rate - cut expectations in the federal funds rate futures market are presented in relevant figures [8][11][17] U.S. Macroeconomic and Liquidity - Figures show the year - on - year inflation trend in the U.S., the annual cumulative fiscal deficit of the U.S. federal government (fiscal year), the U.S. economic surprise index, the U.S. ISM PMI, the U.S. consumer confidence index, the U.S. financial conditions index, the growth rate of U.S. housing rents, the number of U.S. unemployment benefit claimants, the year - on - year growth rate of U.S. hourly wages, the U.S. non - farm payroll data, the year - on - year growth rates of new housing approvals, starts, and sales in the U.S. real estate market, the year - on - year growth rate of U.S. personal consumption expenditure, the U.S. break - even inflation rate, and the MOVE index of U.S. Treasury volatility and the VIX fear index [8][24][37] Exchange Rate - Figures show the one - year trend and recent changes of non - U.S. currencies, the Sino - U.S. sovereign bond yield spread, the relationship between the U.S. dollar index and the 10 - year U.S. Treasury yield, the relationship between the U.S. dollar index and the RMB index, and the change in the one - year lock - in cost of the U.S. dollar against the RMB [8][48][56] Chinese - Issued U.S. Dollar Bonds - Figures show the return trends of Chinese - issued U.S. dollar bonds since 2023 (by level and by industry), the yield and spread trends of investment - grade and high - yield Chinese - issued U.S. dollar bonds, and the returns in the past two weeks (by level and by industry) [8][66][71] Rating Actions - In the past two weeks, the three major international rating agencies have taken 11 rating actions on Chinese - issued U.S. dollar bond issuers, including 5 rating cancellations, 4 rating upgrades, and 2 initial ratings [73][74]