Part 5/11:
The markets reacted sharply to these developments. Specifically, bond markets exhibited increased volatility. The 30-year U.S. Treasury yield rose by four basis points to nearly 4.9%, reflecting investor concerns over inflation and the stability of U.S. debt valuation. Conversely, two-year yields fell, suggesting some market expectations of imminent rate cuts by the Fed—despite the political turbulence. The shape of the yield curve steepened significantly, with the spread between five-year and 30-year Treasuries reaching levels not seen since 2021.