A flashback to the 2013 "taper tantrum"! The "global asset pricing benchmark" surges 50 basis points in a single month, a truly rare occurrence.

Title context: A flashback to the 2013 "taper tantrum"! The "global asset pricing benchmark" surges 50 basis points in a single month, a truly rare occurrence. Text: The U.S. Treasury market is experiencing its most brutal monthly selloff in four years, with volatility intensity that has reached historic warning thresholds and triggered a chain reaction across the global asset pricing system. The 10-year U.S. Treasury yield surged more than 50 basis points in September alone, breaking through 5.3% to touch its highest level since 2002, far exceeding its 2007 peak. This magnitude is extremely rare for a market worth $32 trillion and regarded as the anchor of the global financial system. According to Bloomberg and the Financial Times, this selloff has evolved from being fundamentals-driven into a vicious cycle dominated by forced technical sellingrising yields trigger forced position reductions by some funds, further depressing bond prices, pushing up borrowing costs, and triggering a new round of selling. Priya Misra, portfolio manager at JPMorgan Asset Management, warned, "It's a vicious cycle, and you have to wonder what breaks it. Nobody wants to stand in front of the train." The 10-year real rate rose 57 basis points in a single month. The stark historical precedent is the 2013 "Taper Tantrum"when then-Fed Chairman Bernanke signaled a reduction in asset purchases, triggering violent turmoil in the bond market and large-scale selling in stocks. The current single-month real rate swing is one of the most severe since that tantrum. The sustained rise in yields has already transmitted to the real economy, pushing up household mortgage costs and corporate financing costs, and weighing on stocks. Blerina Urui, chief U.S. economist at T. Rowe Price, said, "The upward trend in yields is clear, and many of the drivers are structural and will persist for a long time." Vicious Cycle Takes Shape, Forced Selling Emerges in Succession This round of Treasury selling was initially driven by concerns over the scale of U.S. public debt and inflation, but this week it has evolved into a wave of forced liquidation dominated by technical factors. Matthew Scott, global head of trading at AllianceBernstein, pointed out that the main force behind this week's massive selloff in long-term Treasuries came from hedge funds and real estate investment trusts (REITs) holding large amounts of mortgage-backed securities (MBS). The logic: as borrowing costs rise, U.S. homeowners' willingness to prepay declines, the duration of MBS holders is passively extended, and to hedge against this change, they are forced to sell other long-term bonds, including U.S. Treasuries. Barclays analyst Amrut Nashikkar noted that similar dynamics are playing out in the Treasury futures marketleveraged funds holding large positions are forced to rebalance their portfolios. Daniel Gottlander, head of North American interest rate swaps trading at Citi, agreed: "When there's a massive selloff, you need to reduce risk in other parts of your portfolio, which is why everything happens at once and the spillover effects are very significant." He also explicitly stated that currently "the marginal buyer has yet to appear," and the dip-buying that would normally play a stabilizing role in a normal market environment is absent. Policy Tools Prove Ineffective, Fundamental Pressures Persist Policy-level responses have failed to effectively curb the selling momentum. Treasury Secretary Bessent's earlier decision to expand Treasury purchases failed to stop yields from continuing to climb. Inflation data also offered no comfort to the market. Data released Wednesday showed that the Fed's preferred inflation gaugethe personal consumption expenditures (PCE) price indexheld at 3.4% year-over-year in August, below market expectations of 3.7%, but this result had minimal effect in boosting the bond market. From a fundamental perspective, sharply rising energy prices have intensified inflationary pressure, and inflation directly erodes the value of bonds that provide fixed interest income. In addition, massive financing needs of large artificial intelligence companies, strong U.S. economic growth expectations, and U.S. public debt exceeding $40 trillion all constitute structural factors pushing yields higher. At the Fed level, the Federal Open Market Committee under Chairman Warsh voted unanimously to raise rates earlier this month, and the market currently expects several further rate hikes over the next 12 months. The third quarter not only shattered market hopes for "lower rates for longer" but completely ended that expectation. Looking at the trajectory of G20 central bank actions, only the Reserve Bank of Australia raised rates in the first quarter, increasing to four in the second quarter, and in the third quarter, multiple major central banks including the Reserve Bank of Australia, the European Central Bank, the Bank of Japan, and the Federal Reserve all raised rates in succession, with the combined force of global monetary policy tightening continuing to strengthen. Yields Return to the Turn of the Century, Structural Shift May Be Established Looking further, the 10-year U.S. Treasury yield touched an intraday high of 5.306% on Wednesday, the highest level since 2002. This means U.S. borrowing conditions have not merely returned to "normalization" before the 2008 financial crisis, but may mark a deeper structural shift. According to The Wall Street Journal, the last time yields were at this level, the dot-com bubble had just burst, and investors still had fresh memories of the sustained high rates of the 1990s. In the decades that followed, the economics profession widely believed the world had entered a new era of low inflation and low interest rates. The inflation wave triggered by the COVID-19 pandemic challenged this judgment, and current market trends have completely dismantled it. Blerina Urui pointed out that economic growth driven by the AI investment boom, swelling government debt testing investor demand, and inflationary pressure from rising trade barriers are all persistent structural factors. John Briggs, head of U.S. rates strategy at Natixis Corporate & Investment Banking, said that although the U.S. Navy and Gulf oil-producing states have improved their response to Iranian attacks, Brent crude prices remain near $100 per barrel, diesel prices recently hit record highs, and market concerns about oil flow disruptions have not dissipated. Goldman Sachs: Monthly "Speed Limit" Has Been Breached, Stocks Face Historic Pressure Goldman Sachs data reveals the deeper risks of this bond market turmoil. Goldman's Tony Pasquariello pointed out that the 10-year real rate rose 57 basis points in one month, having breached its two-standard-deviation "speed limit" historically associated with negative stock returnsthat is, the monthly "pressure" rule of about 50 basis points in a single month "has just been triggered." Historical records show that whenever the 10-year Treasury yield moves more than 50 basis points in a month, stocks suffer heavy losses. Other Goldman data is equally alarming: the 2-year Treasury yield is up 145 basis points year-to-date, and the 10-year Treasury yield has risen for seven consecutive months. Goldman's credit strategy forecasts a 10-year Treasury yield of 5.29%, at the 100th percentile of all forecast ranges since 2004. However, stocks currently appear not to have fully priced in this pressureor more precisely, only a handful of stocks that make up the market-cap-weighted S&P 500 are unscathed. Over the past month, the median stock fell 5%, while the S&P 500 barely moved, with the only support coming from a 6% monthly gain in the semiconductor sector. Bob Doll, chief investment officer at Crossmark Global Investments, warned that if the Fed truly wants to bring inflation down to 2%, it may have to tighten financial conditions to "restrictive" levels, "and that is something the stock market will not like." With marginal buyers absent, forced selling continuing, and policy tools having limited effect, there is still no clear answer as to when this vicious cycle can be broken. This article is reprinted from "Wall Street See" (Wall Street CN), author: Zhao Ying; GMTEight editor: Chen Siyu.