CITIC Securities pointed out that considering the bottom line level of interest rates on US bonds, the federal funds target interest rate has a strong supporting effect on short- to medium-term interest rate levels in each round of interest rate hike cycles, but policy interest rates in the middle and late stages of interest rate hikes have limited support for long-term interest rates. The main reason for the decline in interest rates on 10-year US bonds in the later stages of interest rate hikes was the decline in forward policy interest rate expectations. The point at which interest rates on US bonds peaked essentially depends on when forward policy interest rate expectations peak.

Although interest rates on medium- to short-term US bonds may continue to rise with policy interest rates, the Fed's continued hawkish will increase expectations of long-term interest rate cuts. As a result, subsequent more hawkish statements by the Fed may have limited impetus for interest rates on 10-year US bonds. The risk that interest rates on 10-year US bonds were high before they broke through is low. If the Fed is more hawkish in the future, interest rate cuts will be even greater in the future, and interest rate levels on 10-year US bonds will be priced into expectations of more long-term interest rate cuts compared to short- to medium-term interest rates.

longer term, after this round of interest rate hikes stops, interest rates on 10-year US bonds are expected to be affected by interest rate cuts and there is a certain downside risk. The sharp decline in interest rates may begin around three months before interest rate cuts begin. In the short term, we need to pay attention to the risk of rising interest rates being blocked by the rise in the US government's debt ceiling.