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[The Dollar Devaluation Trade Faces a Reality Check, with Conflicting Signals in the Bond and Forex Markets] ⑴ The recent simultaneous record highs in gold and US stocks have sparked heated market discussions about the dollar's devaluation trade. ⑵ JPMorgan analysts proposed the concept of the "devaluation trade" earlier this year, predicting that fiscal expansion would be positive for gold. ⑶ Supporters of the devaluation theory point to increased US government borrowing, rising debt expectations, and the Federal Reserve's renewed interest rate cuts as key evidence. ⑷ However, the bond and forex markets haven't exhibited the typical hallmarks of a devaluation panic: the dollar hasn't plummeted, and US Treasury yields haven't surged. ⑸ The 10-year US Treasury yield fell below 4.00% last week, reaching its lowest level since April, while the 30-year yield has fallen by approximately 20 basis points this year. ⑹ The inflation-protected bond market is also signaling calm, with the break-even inflation rate on 10-year TIPS falling to 2.275%, its lowest since June. ⑺ After a weak first half of the year, the US dollar index has stabilized since April and has recently significantly outperformed other G10 currencies. ⑻ Experts suggest that if a devaluation panic truly occurs, funds should flow from the US dollar and US Treasuries to gold, but there is currently no evidence of such flows. ⑼ Institutional data shows that up to 80% of portfolio flows into the US market are currency hedged, reflecting investors' cautious attitude towards the US dollar. ⑽ Current market behavior is more likely due to central bank asset allocation adjustments, private sector portfolio rebalancing, or momentum-driven trading. ⑾ In contrast to the warnings issued by the $28 trillion gold market, the $28 trillion Treasury bond market and the $10 trillion daily foreign exchange market have not confirmed the devaluation narrative.