At the same time, the treasury selling process is capturing speed. The 5.02% yield is now in play, and if that continues, Jerome Powell and his team won't have room to wait.

The Federal Reserve will need a quantitative easing emergency if Treasury yields maintain a 5% increase. The Fed will need to launch emergency quantitative easing if Treasury yields continue to rise above 5%, Deutsche Bank said on Wednesday, after the 30-year yield reached 5.02% - the highest since November 2023.

This spike came when investors dumped long-term U.S. debt, in response to Donald Trump's trade tariffs and increasing concerns that U.S. assets are no longer safe.

The warning came directly from George Saravelos, global head of FX strategy at Deutsche. He stated in a note: "If the recent turmoil in the U.S. Treasury market continues, we will see no option for the Fed but to step in with emergency Treasury purchases to stabilize the bond market."

George described it as a "circuit breaker." The last time something like this happened was in 2020, when the Fed cut rates and launched a massive bond-buying program to halt the financial collapse during the COVID era.

The Federal Reserve returns despite the chaos in the bond market.

The Fed has not made any moves yet. No announcements, no liquidity support, no indication that it is ready to jump in.
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