The structural issues of the high-yield era continue. Besent's strong medicine lasted only a day, and the US10Y quietly rebounded again. Today, the rise in long-term bond yields and oil prices seems to be heavily influenced by Trump’s announcement yesterday of the 'most severe economic actions ever taken against any country' targeting Iran. He called it an unprecedented 'economic war and economic isolation.' Trump believes economic sanctions and blockades can force Iran to compromise, while Iran thinks its asymmetric advantage in the Strait of Hormuz will make the U.S. suffer. This is exactly what I discussed here a few days ago: https://(((x.com)))/qinbafrank/status/2089538610047639947?s=46&t=k6rimWsEbo2D2tXolYcM-A — signs of a long-term U.S.-Iran standoff. The current rise in long-term bond yields is driven by several factors: oil prices, fiscal deficit bond issuance, and the wave of bond issuance by AI infrastructure and tech companies. I talked about this in detail in the tweet about the high-yield era two days ago. Fiscal deficit bond issuance and the AI infrastructure tech company bond wave are structural issues that are hard to reverse in the short term. Regarding the fiscal deficit and excessive issuance of government bonds, Besent’s proposed remedies are: 1) Adjusting the maturity structure, issuing fewer long-term bonds and more short-term bonds; 2) Increasing the scale of single repurchase operations to suppress long-term bond yields; 3) Supporting the Bank of Japan to prevent it from dumping U.S. bonds to save the yen. But so far, the results don’t seem very promising. Tech companies issuing bonds won’t stop anytime soon either. Finally, the focus shifts to oil prices. The key here is who can endure more—Iran or the U.S.? As discussed earlier here: https://(((x.com)))/qinbafrank/status/2089538610047639947?s=46&t=k6rimWsEbo2D2tXolYcM-A — Iran seems to have a stronger endurance. Under a theocratic system, ordinary citizens don’t have much say. The core issue is what I mentioned here: https://(((x.com)))/qinbafrank/status/2082316157416321504?s=46&t=k6rimWsEbo2D2tXolYcM-A — will Trump eventually accept that the Strait of Hormuz may never return to its pre-conflict state? As noted in the tweet about the 'high-yield era' two days ago: 'The market’s short-term tolerance range for the 10-year yield is shifting upward. 4.7% may no longer be a hard red line; 4.9%–5.0% is becoming the new pressure boundary.' But once it crosses 4.7%, the higher it goes, the more the market enters a valuation friction zone, increasing volatility, intensifying divergence, and making things very uncomfortable. This post is sponsored by @bitget_zh: 'Bitget Buy U.S. Stocks: Instant entry, seamless trading.'