Recently, the 30-year U.S. Treasury yield broke 5.3%, hitting its highest level since 2007. Now, the 10-year yield has climbed to 4.85%, marking a near three-year high. The Fed hasn’t even started a new round of rate hikes, but the bond market has already done it for them. The market is repricing for sticky inflation, prolonged high interest rates, and increased U.S. debt supply. The rise in the 30-year yield reflects concerns about U.S. fiscal health and long-term debt. Now, the pressure has shifted to the 10-year yield, which means mortgages, corporate financing, and U.S. stock valuations are all under strain. If the U.S. wants to keep borrowing, it’ll have to pay higher interest. That’s why tonight’s PPI is crucial, and tomorrow’s CPI release is the real game-changer. If inflation cools, the Fed might have room to pause or even cut rates. But if oil prices and inflation remain high while the economy gets dragged down by high rates, the U.S. could be heading toward stagflation. At that point, it’s either stick with tightening and accept a recession, or loosen policy to save the economy and pay the price with higher inflation and currency devaluation.