US Bonds: The Cost of Capital — June 12, 2026 [RISK ON]

REGIME: The current market regime is BULLISH, as indicated by the Alphameter score of +19/100, which suggests a risk-on environment where rising yields still signal growth and long bonds barely earn in this dataset, with TLT returning +1.3%/yr in risk-on episodes. SENTIMENT DRIVER: The most important headline catalyst is "Pirro's losses in Fed investigation should stay on the books, judge rules", which may have a limited direct impact on US Bonds price action, but could influence market sentiment and reinforce the current risk-on environment, as the 10Y-2Y Yield Curve Spread of 0.40% indicates a normal and steepening yield curve. ANALYSIS: Through the lens of "The Cost of Capital", the current steepening yield curve suggests that the market is pricing in growth and inflation, which is consistent with the risk-on regime, as evidenced by the Alphameter score and the +1.0% 30-day change in US Bonds price, which is 6.0% above its 200-day SMA. The yield curve shape implies that risk assets are likely to outperform, and the backtest data shows that long bonds, such as TLT, return +1.3%/yr in risk-on episodes, but barely earn in either regime. The cost of capital is increasing, but the market is still willing to take on risk, as indicated by the +0.2% 7-day change in US Bonds price. RISK FACTORS: Two specific catalysts that could flip the signal BEARISH for US Bonds are a 10Y-2Y Yield Curve Spread inversion below -0.10%, which would indicate a significant shift in market sentiment towards a risk-off environment, and a 200-day SMA crossover below the current price, which would suggest a reversal in the current uptrend. WATCH: The upcoming event to watch is not specified in the provided data, therefore it is not possible to provide a specific date and event name.