Interest rates rise even without a hike? Global government bond yields surge on Wash's ploy | Seo Dong-ju, Kim Dong-hwan, Lee Yoon-soo Eric, CEO of Master's Research Institute

Summary

The discussion focused on the recent surge in global long-term government bond yields after the July FOMC. The guest argued that the bond market no longer believes the Fed's 2% inflation target, because structural forces such as deglobalization, demographics, and AI-driven capex are pushing the world into a higher-inflation regime. This makes long-dated US Treasuries unattractive, yet US equities can still rally because the yield rise stems from bond repudiation rather than strong growth that would crowd out stocks. The guest also pointed to Japan as an early indicator of this bond-market shift and suggested that gold—and potentially Bitcoin—would benefit from the long-term decline in sovereign bond appeal.

• Yield curve steepening after July FOMC shows market disbelief in the 2% inflation target.
• Structural forces (deglobalization, AI capex) push inflation and long-term yields higher.
• A renowned bond expert calls for CPI of 3-3.5% and long-end yields of 3.5-4.5%.
• Rising yields do not hurt US stocks; the Dow hits a record high as the old correlation breaks.
• Japan's policy of allowing long yields to rise reflects a global bond-regime change.
• Central banks have shifted from US Treasuries to gold, a trend that will continue.
• Bitcoin could follow gold as an alternative when bonds lose their safe-haven status.