Date: May 20, 2025 By: The Macro Pulse
We knew this bounce was coming. We said it would squeeze. It just went a bit further than expected. That’s normal. That’s how bear market rallies work. They have to feel real before they die.
Meanwhile, under the surface?
The yield curve just flashed the same setup we saw before the 2008 collapse.
Nobody’s talking about it. But you should be. Market recap
Nasdaq 100 dumped 26% after Trump’s tariffs. It’s now only 4% off all-time highs.
S&P 500 dropped 21%. It’s now just 3% off the top.
This bounce was sharp. Violent. Convincing.
Exactly what a bear rally is supposed to be. But here’s what matters:
Look at the chart.
The US 10-year yield is rising.
The 2s10s yield curve is steepening.
And they’re rising together. That almost never happens unless something big is about to break.
This is not bullish steepening.
This is the market saying:
Inflation isn’t dead
The Fed is cornered
Fiscal risk is spiraling
Long-term debt is no longer “risk-free”
And they want to get paid to hold it
This is what happens when the bond market stops believing in policy control.
In 2007, the steepening came from falling yields. Recession fears. Risk-off.
Now in 2025, the steepening is driven by rising long-end yields. That’s not optimism.
That’s a repricing of systemic risk.
You’re not watching a recovery.
You’re watching the bond market put a gun on the table and say: “Your move, Powell.”
