Between Worlds Weekly Viewpoints

While rising bond yields reflect concerns over inflation and debt, the equity bull market remains supported by productivity and profits. A key systemic risk remains the multi-trillion dollar yen carry trade which could disrupt US Treasury stability.

Key Takeaways

• 1.Bond market yields are rising due to concerns over inflation, government debt, and geopolitics, challenging expectations for interest rate cuts.
• 2.The yen carry trade, estimated at $2.4–3.6 trillion, poses a systemic risk to the $31 trillion US Treasury market if the yen appreciates significantly.
• 3.The current equity bull market is robust and broader than the 'Magnificent Seven' tech giants, with lagging sectors still showing solid cumulative gains.

Table of Contents

• 1. Bond market concerns: Between Washington, Tokyo, and George Town
• 2. Stronger than its reputation: The equity bull market
• 3. Leisure cycling: From the Basel Rhine port to the Grand Palais in Paris

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