Trump's "intervention" in the Federal Reserve continues unabated, with U.S. Treasury yields approaching 5%, raising market concerns about the increasing risk of "emerging marketization" in the United States

The U.S. long-term Treasury bond market sent out unsettling signals again on Wednesday. According to Zhitong Finance APP, the yield on the 30-year U.S. Treasury bond briefly approached 5% during the session, the highest level since July this year, reflecting investors' concerns about future inflation risks and the potential impact on the independence of the Federal Reserve. On Wednesday morning Eastern Time, the yield on the 30-year U.S. Treasury bond rose to 4.92%. Under selling pressure, the yield curve exhibited a "steepening" phenomenon, meaning that long-term rates rose faster than short-term rates. Although the yield ultimately closed at 4.913% at 3 PM Eastern Time, roughly unchanged from the previous trading day, the anxiety in the market did not dissipate. Analysts pointed out that behind this round of selling, investors are worried that Trump's recent tough actions against the Federal Reserve may undermine the central bank's independence, thereby raising inflation expectations and impacting the dollar and U.S. Treasury bond markets, similar to situations in emerging market countries like Turkey. The ICE U.S. Dollar Index (DXY) was nearly flat on Wednesday, having shown signs of weakness on Tuesday. Mark Rosenberg, co-founder of GeoQuant, bluntly stated, "The U.S. is becoming the developed economy closest to emerging market risks, which could have profound effects on the dollar and U.S. Treasury bonds." Recently, Trump has taken a series of actions that have shaken the market. He not only announced the dismissal of Federal Reserve Governor Cook, accusing him of involvement in mortgage fraud, but also criticized Federal Reserve Chairman Powell for not lowering interest rates quickly enough. Trump claimed that the dismissal decision was effective immediately, but Cook stated he would fight back, leaving the market uncertain about the final outcome. At the same time, Trump also fired the head of the U.S. Bureau of Labor Statistics, Erika McEntarfer, due to poor performance in the July employment report; in addition, he pushed for the U.S. to acquire a 10% stake in Intel (INTC.US). These actions have led the market to draw parallels with government intervention models in countries like Turkey. The core concern of the market is that political risk in the U.S. is accelerating towards "emerging marketization." Rosenberg explained that this trend refers to the process of increasing political uncertainty, policy volatility, and market instability, phenomena that have been more common in emerging markets in the past. GeoQuant data shows that the current political risk score for the U.S. is 41.79, approaching the average value of 44 for 28 emerging market countries, and not far from Turkey's 51.31. Since 2018, the correlation between U.S. political risk and the yield on the 30-year U.S. Treasury bond has been strengthening; at the same time, since Trump announced a large-scale tariff plan in April, the dollar index has continued to weaken, reflecting that political risk is directly affecting the exchange rate. Turkey is the most frequently cited cautionary case. For years, President Erdogan has repeatedly intervened in central bank interest rate decisions, leading to persistently high inflation and a continuous depreciation of the lira. In July of this year, the country's CPI rose 33.5% year-on-year, and the lira fell to a historic low against the dollar. Although the U.S. economic fundamentals are far superior to those of Turkey, its political trajectory is considered to have convergence risks. It is worth noting that despite rising political risks, the U.S. stock market remains robust. On Wednesday, the Dow Jones Industrial Average rose 0.32%, the S&P 500 index closed up 0.24% and set a new historical high, and the Nasdaq Composite Index rose 0.21% Rosenberg pointed out that the U.S. stock market seems to be more immune to political uncertainty, even showing a phenomenon where "the higher the risk, the more the S&P 500 rises." He analyzed that the diversification, scale, and depth of the U.S. market still have strong appeal, and investors lack better alternative options. Although the U.S. remains one of the most attractive investment destinations globally in the short term, market participants generally believe that Trump's interference with the Federal Reserve and direct interference with statistical agencies and large technology companies have continuously narrowed the gap between U.S. and emerging market risks. As Rosenberg stated, "The U.S. is moving faster towards Turkey, rather than Turkey moving closer to the U.S. This is a fact." However, he also emphasized that it is still unlikely for the U.S. to experience an extreme situation where the central bank completely loses its independence