Attention Bitcoin Bulls: The U.S. 10-Year Yield Isn't Budging Despite Fed Rate Cut Hopes
Resilient U.S. 10-year Treasury yields and a steady dollar challenge Bitcoin bulls' hopes that Fed rate cuts will boost risk assets.Summary
Bitcoin bulls are relying on expected Federal Reserve rate cuts to lower bond yields and weaken the dollar, which typically supports risk assets like crypto. However, signals from the bond and foreign exchange markets suggest this traditional correlation is breaking down. Despite the Fed's easing cycle, the 10-year Treasury yield remains stubbornly above 4% and has actually risen since the first rate cut in September 2024. This stickiness is attributed to concerns over fiscal debt, abundant bond supply, persistent inflation worries, and upward pressure from potential Bank of Japan rate hikes.
Furthermore, the dollar index has shown resilience, bouncing off recent lows near 96.000 and failing to decline significantly despite monetary easing hopes, partly due to the relative robustness of the U.S. economy. The market dynamic has shifted: the straightforward playbook where dovish Fed signals automatically drive down yields and the dollar, boosting Bitcoin, may no longer be valid, requiring investors to remain alert.
(Source：CoinDesk)