The recent influx of bulls into the US bond market has just been hit hard. The remarks of two Federal Reserve officials and the latest signs showing stubborn inflation have raised the possibility of interest rate hikes, leading to a sharp drop in US Treasury bonds. Tuesday's sell-off spread to US Treasury bonds of various maturities. Federal Reserve Governor Christopher Waller expressed support for interest rate hikes and said that if inflation continues to accelerate, he will prefer to raise interest rates by 50 basis points, and traders immediately digested the more aggressive path of the Federal Reserve's austerity. Higher-than-expected consumer price data further fueled the shift, and subsequent hawkish remarks by Dallas Federal Reserve Governor Lori Logan exacerbated the shift. This round of sell-off drove the yield on US 2-year Treasury bonds to the biggest increase in 19 months. The 10-year yield once returned above 5%, which caught investors who recently poured into US bonds or reduced their bearishness due to market unease surrounding AI-themed transactions. Bank of America strategists wrote in a November 8 report that over the past week, asset management companies have continued to establish long positions on futures for various periods of the yield curve, while at the same time making up for short bets in the long term.

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