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ISM hits a four-year high, US Treasury yields fall — the market is going against the Federal Reserve Brothers, today I want to talk about something strange. On August 3rd, the ISM Manufacturing PMI was released — 55.6. What level is that? The highest since May 2022, expanding for the seventh consecutive month. New orders at 56.7, production index at 58.5 hitting a new high since the end of 2021. Manufacturing employment grew for the first time since last September. Goldman Sachs directly raised its Q3 GDP forecast from 1.5% to 2.4%. The economy is booming. CME data shows the probability of a 25 basis point Fed rate hike in September has surged to 67.2%. Logically — strong economy and strong rate hike expectations — US Treasury yields should be surging upwards, right? But what happened? On August 3rd, the 10-year Treasury yield fell below 1.70% intraday, the lowest since June 1st. The 30-year yield dropped more than 4 basis points to 5.226%. Data supports rate hikes, but yields are falling. The market is going against the Fed. Why? Two forces are pulling yields down. First, oil prices crashed. On the 3rd, Trump announced the resumption of US-Iran talks, saying the Strait of Hormuz "could be fully open as soon as tomorrow." WTI crude futures plunged over 7% at one point, Brent fell below $82. Although Iran’s Foreign Ministry quickly denied the talks, the market already reacted with a drop out of respect. Geopolitical risk premium was instantly removed — inflation expectations cooled, so long-term bond yields naturally fell. Second, someone is "supporting" US Treasuries. US Treasury Secretary Janet Yellen did something — publicly called on the Fed to expand the FIMA repo facility. What is FIMA? It allows overseas central banks like Japan’s to use US Treasuries as collateral to swap for dollars without directly selling Treasuries on the market. Japan holds about $1.14 trillion in US Treasuries, the largest overseas holder globally. If Japan were to frantically sell Treasuries to intervene in the yen, the 30-year yield would probably have broken 6% long ago. Yellen is basically saying: don’t sell, I’ll have the Fed lend you money. This is a solid positive for US Treasuries. Now the 30-year yield is stuck around 5.3%. On one side, strong economic data and rate hike expectations push yields up; on the other, falling oil prices and liquidity support pull yields down. Bank of America calls this a "textbook inflation credibility shock" — the market doesn’t believe the Fed can control inflation. The 30-year Treasury term premium has surged to 1.51%, the highest since 2013. Is 5.3% a top or a bottom? Nobody knows. But one thing is certain — the market no longer obediently listens to the Fed. What does this mean for crypto? Bitcoin is now fluctuating around $63,000, down nearly 50% from the $126,000 high at the start of the year. The macro logic is increasingly twisted — Rate hikes are bearish for risk assets, but falling oil prices are bullish for risk appetite. Falling Treasury yields theoretically benefit BTC, but rate hike expectations suppress capital inflows. Two forces are fighting, and BTC is caught in the middle. My judgment: If long-term Treasury yields really top out at 5.3% — that’s a medium-term positive for BTC. Expectations of a liquidity inflection point will gradually be priced in. But if the Fed really hikes in September and short-term rates continue to rise — risk assets will take another hit. What’s most feared now isn’t the rate hike itself, but the word "uncertainty." The market isn’t afraid of bad news, it’s afraid of not knowing how bad the news really is. As long as 5.3% isn’t broken, bulls and bears won’t dare to take heavy positions. $BTC $BZ $CL #ISM创四年新高，美债收益率反跌