According to BlockBeats, Bank of America's chief strategist Michael Hartnett highlighted in his latest report the staggering scale of U.S. government spending, noting that spending $100 every second would take 2,248 years to match the $7.1 trillion spent by the government in the past year. As the "Great Beauty Act" progresses, Hartnett tactically anticipates that rising U.S. Treasury yields and a declining dollar (with 30-year Treasury yields exceeding 5% and the dollar index falling below 100) will negatively impact risk assets.
Last week, the cryptocurrency market saw an inflow of $2.3 billion, reaching a new cumulative high, while U.S. tech stocks experienced an epic outflow of $6.8 billion. Additionally, high-yield bonds attracted $9.8 billion over the past four weeks, marking the highest level since November 2023.
Hartnett sharply warned that a collapse in long-term U.S. Treasuries and the dollar could spell disaster for U.S. stocks. A Treasury yield above 5% poses significant risks to the highly financialized U.S. economy. When the five-year Treasury yield exceeds 3.25%, the U.S.'s $1.2 trillion interest payments will worsen rapidly. However, if yields remain below 3.25%, the cost of U.S. debt may stabilize.