WS #14775
The 10-year Treasury yield has surged to a 19-year high, with markets pricing in a 75% probability of a Fed rate hike. This tightening of financial conditions is acting as a powerful headwind for risk assets, dragging Bitcoin below $84,000 and forcing the S&P 500 Equal Weight index (RSP) to trade near relative lows against the cap-weighted SPY. While US equity funds saw a brief inflow driven by AI optimism, the broader macro environment is defined by liquidity withdrawal, which disproportionately penalizes high-multiple growth and speculative assets.
Macro Liquidity Squeeze
The 10-year Treasury yield has surged to a 19-year high, with markets pricing in a 75% probability of a Fed rate hike. This tightening of financial conditions is acting as a powerful headwind for risk assets, dragging Bitcoin below $84,000 and forcing the S&P 500 Equal Weight index (RSP) to trade near relative lows against the cap-weighted SPY. While US equity funds saw a brief inflow driven by AI optimism, the broader macro environment is defined by liquidity withdrawal, which disproportionately penalizes high-multiple growth and speculative assets.