#美联储政策与货币政策 Seeing the volatility of U.S. Treasuries hit the largest annual decline since 2009, a clear timeline comes to mind. That wave in 2009 was the tail end of the global financial crisis, and the relief was brought about by central banks flooding the markets with liquidity. Now, witnessing a similar decline, the underlying logic is completely different—this time, the Federal Reserve is actively cutting rates, and market concerns about recession risks have been effectively alleviated.

The MOVE index has fallen from 99 at the beginning of the year to 59 now, which essentially reflects a convergence of expectations. What does a calm bond market mean? It indicates that participants’ consensus on the Fed’s policy direction is strengthening, and uncertainty about the future is decreasing. This is also clearly reflected in the crypto market—when volatility in traditional risk assets declines, it is often accompanied by a recovery in risk appetite.

I have seen many such turning points. The shift in rate hike expectations at the end of 2016, the resolution of liquidity crises in 2019, the inflation concerns at the end of 2021... Each significant drop in volatility signals the brewing of a new cycle. However, this time is a bit different because we are coming down from a high interest rate environment voluntarily, not being forced to bail out the markets. This proactive stance means there is still policy room, and if economic data underperforms later, further adjustments can be made.

This calm in the bond market should be cherished, because history tells me that such moments are often the best windows for early positioning.