While equity markets celebrate, the bond market faces a critical test. Treasury yields remain near 24-year highs, complicating the landscape for a heavy week of US debt issuance. Although Tuesday’s 3-year note auction proceeded without incident, it locked in rates not seen in two decades. Investors are now bracing for 10-year and 30-year paper sales, with the New York Fed’s 10-year “term premium” hitting a 12-year high of 96 basis points—a clear signal of rising anxiety over inflation and long-term fiscal sustainability.

Attention now shifts to the Federal Reserve. Wednesday’s release of the September meeting minutes will offer the first detailed look at the policy pivot that ended a three-year rate-hike hiatus. Simultaneously, the Atlanta Fed’s GDPNow model has dialed back its growth forecast to 3.7%. While this cooling reflects a widening trade deficit, analysts suggest the surge in imports actually underscores robust domestic activity fueled by the ongoing AI boom. Across the Atlantic, European bond markets remain on edge as political instability in France forces a re-evaluation of sovereign risk, with debt spreads widening to levels reminiscent of the 2010-2012 euro crisis.