U.S. Treasuries remained under selling pressure, with the 10-year yield climbing to about 4.94% and the 30-year briefly reaching 5.35%, according to a Bitunix analysis cited by BlockBeats on Sept. 12. The move suggested that markets are still pushing deeper into a higher-rate pricing regime.
The U.S. Treasury raised the ceiling for long-dated bond buybacks to $6 billion, but actual purchases came to $5.19 billion. Yields still moved higher. In Bitunix's view, that shows policy operations can improve liquidity, but cannot easily overturn the structural pressure created by inflation, fiscal deficits, and long-term capital demand.
Oil prices and inflation expectations remain in focus
The analysis said rising oil prices are making that tension more pronounced. Higher energy costs could lift inflation expectations again and prompt investors to increase bets on another Federal Reserve rate hike. Market expectations for a rate increase have now risen to 71%, meaning the bond market has already started to price in a tighter policy path before the CPI data is released.
The more important question, the report said, is not just a single month of inflation data. What matters is whether the market believes pressure from energy, tariffs, and supply chains could cause underlying inflation to lose its downward momentum again.
AI-related capital spending is changing long-end pricing
Bitunix also pointed to the capital spending wave tied to AI buildout as a factor reshaping long-dated Treasury pricing. Companies are issuing large amounts of debt to compete for funding, which means the U.S. government is not the only borrower demanding capital. When money is being drawn at the same time by both the government and corporations, long-term rates become harder to push down through Treasury buybacks alone.
Stanley Druckenmiller even said Treasury yields may be 「even a little low」 at current levels given the scale of capital expenditure and funding competition. That comment highlights how some investors are treating the current rise in yields as a fundamental shift rather than a simple swing in market sentiment.
The debate has shifted from policy tools to fundamentals
For now, Bitunix said the real issue facing Treasuries is not how much the Treasury Department can buy, but what level of yield the market will demand before taking on long-term U.S. debt.
If CPI comes in hot, expectations for more rate hikes and higher long-end yields could reinforce each other. If inflation cools, markets will need to reassess whether current elevated yields can retreat. The core of the current contest, the analysis said, is gradually moving away from whether policy can influence the market and toward whether policy can overcome fundamentals.