Historic Spike in U.S. Treasury Yields Marks Trump’s Highest Interest Rate Surge

Since the start of 2024, the 10‑Year U.S. Treasury Yield climbed to 3.5%, marking the highest interest rate jump in Trump’s second term.

Rising Yields, Falling Bond Demand

■In Q1 2024, the 10‑year yield rose to 3.5%, climbing to 3.9% by Q4.

■High rates reduced bond demand by 12%, pushing investors toward riskier assets.

■Inflation concerns and escalating U.S. government spending fueled the rise.

AI Spending: A Growth Signal

■AI investments surpassed $200 billion, bolstering economic expansion.

■Giants like Microsoft and Google are pouring $50 billion into AI projects, reshaping market expectations.

■AI could soften interest rates by about 1.2 points.

Iran Conflict: Rising Geopolitical Uncertainty

■Escalating tensions between the U.S. and Iran along the Syrian border heightened risk.

■Geopolitical risk lowered bond prices, pushing yields higher.

■Sectoral impacts: Energy and Defense stocks rose +4.3%.

Market Reactions: S&P 500 and VIX

■The S&P 500 grew +2.1% despite the rate hike.

■The VIX (Volatility Index) spiked to 18%, reflecting heightened market uncertainty.

■Gamma Squeeze risks increased short‑term volatility by 25%.

While the rise in rates may cause short‑term turbulence in the bond market, the sustained growth from AI spending could preserve long‑term market stability. Investors should consider high‑yield bonds alongside the growth prospects in the technology sector.