Prudential's fixed income department global investment grade bond director and fund manager Steve Boothe stated that the US economy still has resilience, and recent energy shocks are seen as temporary factors. The bank believes that the Fed's policy will still lean towards being accommodative. The US bond market is gradually shifting towards being more market-driven, and the current heavy focus on duration is less attractive, instead it is better to focus on positioning through the yield curve and relative value strategy deployment. Prudential states that the momentum of the US economy is slowing down, but it is not entering a recession. Economic activity is cooling off from the previous high levels driven by fiscal stimulus, but the balance sheets of the private sector still have resilience to support economic activity. The labor market appears stable on the surface, but is gradually cooling down, especially in forward-looking indicators such as job turnover. Monetary policy is slightly tight at the interest rate level, but some tightening effects are offset by balance sheet changes, making the overall financial environment closer to neutral. The Fed has been criticized for misjudging the causes of inflation in the past, and with the economic growth weakening, it may shift to cutting interest rates earlier and more actively. The recent energy shocks are expected to be temporary and demand-related factors, rather than reasons to further tighten policies, and the Fed's policy stance is still expected to lean towards being accommodative. Overall, the policy mix suggests that the economy is likely to achieve a "soft landing," short-term interest rates will shift to being dovish, and authorities will also push for balance sheet normalization to restore a more typical market operation mechanism. Prudential also mentioned that the US Treasury market is transitioning from an era dominated by the Fed, suppressing duration premium and volatility, to a new era driven more by the market, where the impact of Chinese bond supply and the balance sheets of the private sector on valuations will become increasingly crucial. This shift may push up term premium and structurally steepen the yield curve. As a result, the reliability of US Treasury bonds as a safe-haven tool is decreasing, interest rate fluctuations are increasing, and the correlation with risk assets is more likely to fail temporarily. Especially in an environment where real interest rates and term premiums are rising, situations where bonds and risky assets such as stocks and credit show positive correlation are becoming more common, weakening the benefits of diversification. In this environment, the attractiveness of heavily focusing on duration is low, and it is better to focus on positioning through the yield curve and relative value strategy deployment. The function of US Treasury bonds is gradually changing, increasingly being used for liquidity management and risk hedging, rather than as the main source of returns.