Dark clouds loom over U.S. debt, with bond yields surging past 5%, leading to declines across all major U.S. stock indices. On the 22nd, Taiwan's stock market also suffered a drop of 132 points, closing at 21,670.

In response, Teng Shengming, deputy general manager of investment strategy at Manulife Investment, stated on the radio program "Finance All the Way" that assuming the U.S. does not actually default, it is still time to treat U.S. bonds as a risk-free rate, as there are few alternatives available, with only the U.S. dollar and Treasuries as viable options.

Teng noted that yields on 30-year and 20-year Treasuries have crossed 5%, while the yield on the 10-year Treasury has soared beyond 4.6%. He stated that when the 10-year yield exceeds 4.5%, it signifies a shift to a different market environment, increasing the sensitivity between stocks and bonds and reducing overall market stability.

He pointed out that risk premiums on U.S. stocks have gradually fallen to levels seen in 2001, suggesting that the market appears to be engaged in a "terrifying balance" game. He emphasized that if the U.S. does not truly enter bankruptcy, investors should still treat U.S. bonds as a risk-free return, while the yen and euro can be other alternatives, though options are limited.

Teng warned that with the low risk premium in U.S. stocks, prices seem excessively high currently, but adjustments could be forthcoming. He predicts that the Federal Reserve will not cut rates before July, but the likelihood of a rate cut after September could reach 50-60%.

Regarding President Trump's proposal for a large-scale tax cut, he suggested that the current U.S. circulating debt has doubled since Trump 1.0, raising concerns in the market. However, traditional Republicans are strongly pushing for tax cuts, which could impact the midterm elections in 2026.

Teng noted that when the U.S. dollar is in a downward trend, it typically lasts about 90 days, which aligns with Trump's 90-day tariff grace period. He predicted that strong Asian currencies could last up to 90 days, possibly continuing until late June or early July, with relevant trade talks expected to reach conclusions by July. He concluded by stating that theoretically, one should consider buying 10-year Treasuries as they approach the 5% yield mark.