US Bonds: The Cost of Capital — April 27, 2026 [RISK ON]

REGIME: The current regime is BULLISH, driven by the Alphameter score of +31/100, which indicates a risk-on environment where rising 10Y Treasury Yields, such as the current 4.31 level, signal growth optimism. SENTIMENT DRIVER: The most important headline catalyst is "Powell’s Final FOMC: Grading His Wins, Losses, and the Mixed Bag He Leaves for Trump’s Fed Pick Kevin Warsh", as it implies a potential shift in monetary policy that could impact the cost of capital and, in turn, influence US Bonds price action, which has risen 0.9% over the past 30 days. ANALYSIS: Through the lens of the cost of capital, the current steepening yield curve, with a 10Y-2Y Yield Curve Spread of 0.53%, suggests a positive environment for risk assets, consistent with the Alphameter's risk-on signal, where top performers like Copper have historically returned +45.7%/yr. The normal yield curve shape implies that the market is pricing in a growth scenario, which is bullish for US Bonds in the short term, as they are currently 3.0% above their 200-day SMA. However, it is essential to monitor the yield curve shape, as an inversion could signal a recession and flip the regime to risk-off. RISK FACTORS: Two specific catalysts that could flip the signal bearish for US Bonds are a yield curve inversion, where the 10Y-2Y Yield Curve Spread falls below -0.1%, and a significant increase in Jobless Claims, above 250K, which would indicate a deterioration in labor market conditions. WATCH: 2026-04-29: FOMC Rate Decision — Federal Funds Rate, as this event has the potential to significantly impact the cost of capital and the yield curve shape, and thus influence the US Bonds price action.