According to The Kobeissi Letter, the US 10-year Treasury yield has climbed 35 basis points in May 2025, reaching 4.50% despite ongoing efforts to stabilize the bond market. Recent trade deal announcements are causing traders to price out potential Fed rate cuts, providing Federal Reserve Chair Powell with more justification to maintain current rates. This upward movement in yields signals tighter financial conditions, which historically puts downward pressure on crypto asset prices as investors rotate into safer yield-generating instruments. Market participants should closely monitor bond yields and Fed policy shifts for their direct influence on crypto market volatility (Source: The Kobeissi Letter, Twitter, May 13, 2025).

According to The Kobeissi Letter, despite the announcement of a US-China trade deal and a 90-day pause on tariffs, the 10-year Treasury yield is approaching 4.50% even as inflation data trends downward (source: @KobeissiLetter, May 11, 2025). Persistent high yields signal that interest rates remain elevated, which continues to pressure both traditional markets and cryptocurrencies. Crypto traders should monitor bond yields closely, as sustained high rates can reduce risk appetite and liquidity in digital asset markets. The expectation for rate cuts remains unmet, increasing volatility and downside risk across crypto assets.