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[Treasury Bond Market Game: Trading Psychology and Risk Signals in the Battle for the 4% Mark] (1) Yesterday, the 10-year US Treasury bond yield returned above 4%, creating a volatile market with prices oscillating fiercely around the key psychological mark. The yield of approximately 4.04% suggests that investors are cautious about purchasing long-term US Treasuries at this year's relatively low yield level. This hesitation stems from dual market concerns about the Federal Reserve's upcoming interest rate decision and whether inflation can be effectively contained. (2) Recently, a clear divergence has emerged in the $29 trillion Treasury bond market. Some investors worry that a weak labor market will force the Federal Reserve to drastically cut interest rates, while others believe the fight against inflation is not over. This divergence is directly reflected in trading strategies. Despite year-round volatility in the bond market, short-term Treasury yields have recently fallen significantly more than long-term Treasury yields. (3) A popular trade in the market has been betting on a "steepening" yield curve, meaning a widening gap between short- and long-term Treasury yields. Not long ago, the yield spread between 10-year and 2-year Treasury bonds reached 65 basis points, second only to the 67 basis points reached in April when Trump's tariff remarks sparked market concerns. However, the recent steepening of the yield curve has slowed, suggesting the possibility of a "pain trade" for investors. (4) Notably, some believe rising inflation, the massive US fiscal deficit, and the impact of Trump's tariff rhetoric on the Federal Reserve's independence could lead to further steepening of the yield curve. If market confidence in the Fed falters, this could put pressure on the US dollar and push up US Treasury yields. (5) Despite recent signs of labor market weakness, expectations of a "soft landing" remain. Some institutions predict that the Fed will implement a series of "accommodative rate cuts" rather than drastically cutting rates due to recessionary risks. The stock market's repeated record highs also reflect this optimism, but some analysts point out that the actual impact of tariffs on inflation and the speed of their transmission remain unclear.