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[Global Bond Markets Enter Danger Zone; 30-Year US Treasury Yield May Surge to 6% Within a Year] ⑴ This month, bond yields have risen to levels that have sounded alarm bells in financial markets. The yield on the 30-year US Treasury note reached 5.20% on May 19, the highest since mid-2007 (before the 2008-09 financial crisis); the 10-year yield touched 4.68% on the same day before falling back, but still remained above 4.50%. Yields on UK, German, and Japanese government bonds also climbed in tandem. ⑵ Robin Brooks, a senior fellow at the Brookings Institution and former chief economist at the Institute of International Finance, pointed out three reasons for this round of bond yield increases: countries borrowed heavily in response to the impact of the pandemic, and the deficits have not seen substantial reduction since; inflation is higher and more volatile than before the pandemic. US federal debt held by the public exceeded 100% of GDP at the beginning of this quarter, approaching the post-World War II record of 106%. The Congressional Budget Office projects a budget deficit of 5.8% of GDP in 2026, with an average annual deficit of 6.1% over the next decade, far exceeding the 50-year average of 3.8%. (3) Geopolitical conditions are driving up military spending, with the Trump administration seeking a 44% increase to a record $1.5 trillion in fiscal year 2027. An even greater budget burden comes from accumulated interest payments from past borrowing sprees, with annualized interest payments in the US exceeding $1 trillion. The futures market currently projects a 70% probability of a Fed rate hike of at least 25 basis points before December, a stark contrast to the two rate cuts anticipated at the beginning of the year. (4) A recent Bank of America fund manager survey shows that 62% of respondents expect the 30-year Treasury yield to break through 6% within the next 12 months. Brown Brothers Harriman currency analysts point out that a danger signal arises when government borrowing costs exceed nominal GDP growth—the UK 10-year government bond yield is nearly 5%, exceeding the average annual nominal GDP growth rate of approximately 4.8%; the Japanese 10-year government bond yield has surged to over 2.50%, far exceeding the country's ten-year average annual nominal GDP growth rate of 1.9%. The US Treasury is attempting to control interest costs by favoring short-term Treasury bill issuance, but this strategy could backfire if the Federal Reserve begins raising interest rates.