Core Viewpoint - The global bond market experienced a significant sell-off on January 20, 2026, primarily driven by rising political uncertainties and a fragile supply-demand structure in the interest rate market, with the U.S. and Japanese long-term bonds leading the decline [1][2]. Group 1: Market Reactions - The 30-year U.S. Treasury yield rose above 4.9%, while the 10-year yield approached 4.30%, leading to a direct increase in discount rates and compressing valuations of stocks and credit assets, with the S&P 500 falling by 2.1% and the Nasdaq by 2.4% [2]. - The escalation of trade tensions and policy uncertainties intensified the sentiment to "sell U.S. assets," resulting in a weaker dollar and increased demand for safe-haven assets like gold and silver [2]. Group 2: Transmission Mechanisms - Three transmission chains amplified the market shock: 1. The rise in Japanese long-term rates forced a global increase in term premiums, impacting U.S. Treasuries and other long-term bonds [2]. 2. The narrative of U.S.-European conflicts transitioned from trade friction to financial tool repricing, leading to market adjustments for cross-border capital allocation and hedging costs [2]. 3. The increase in risk-free rates combined with a decline in risk appetite exerted pressure on emerging markets, particularly those with high beta and external debt dependencies, making them more sensitive to refinancing and exchange rate fluctuations [2]. Group 3: Structural Constraints - The fundamental issue behind the volatility lies in the structural constraints of the U.S. fiscal and debt path, with total U.S. debt projected to reach $38 trillion by the end of 2025 and facing approximately $10 trillion in refinancing pressure in 2026 [3]. - The three major credit rating agencies downgraded the U.S. sovereign credit rating in 2025, raising market concerns about entering a vicious feedback loop characterized by "credit discount → higher yields → increased interest expenses → rising financing costs → worsening fiscal pressure" [3].