The Federal Reserve has been cutting interest rates, but long-term Treasury yields keep climbing.

The 10-year Treasury reached approximately 5.3% this week, while the 30-year approached 5.7%—levels not seen in roughly 24 years.

So what's driving rates higher despite Fed cuts?

In this episode of The Weekly Read, Jeff Kikel explores several forces influencing the global bond market, including strong economic growth, enormous AI infrastructure spending, persistent inflation, and government borrowing.

But one of the most interesting explanations may be coming from Japan.

For years, investors borrowed money at extremely low Japanese interest rates and invested in higher-yielding assets, including U.S. Treasuries.

Now, as Japanese rates rise and the yen strengthens, some investors may be unwinding those positions.

That selling pressure could be contributing to rising Treasury yields worldwide.

Jeff explains the yen carry trade in plain English, why the AI investment boom and rising interest rates are connected, and why he's watching the 6% level on the 10-year Treasury as a potential warning sign.

The takeaway: Don't assume Federal Reserve rate cuts automatically translate into lower long-term borrowing costs. Global capital flows matter.

Exit Rich…Retire Free — The Weekly Read

Hosted by Jeff Kikel

Educational content only. Not investment advice.

Companies mentioned in this episode:

• OpenAI
• Apple Inc.
• Delta Air Lines
• JPMorgan Chase & Co.
• Goldman Sachs
• PIMCO
• NASDAQ
• Exit Rich