On the last day of the Dragon Boat Festival holiday, Taiwan's Central Bank quickly stepped in to guarantee the U.S. dollar and U.S. bonds, seemingly in response to financial concerns spreading from China. During this time, even American investors have begun to doubt the integrity of the U.S. bond market, with figures like Warren Buffett and major Wall Street asset management firms wary of long-term U.S. bonds.

The 'new bond king' Jeffrey Gundlach of DoubleLine suggested that there are only two strategies for 30-year U.S. Treasuries: either avoid them as much as possible or short them completely. Other firms like PIMCO, TCW, and BlackRock are similarly moving away from long-term bonds in favor of intermediate ones.

As June begins, the yield on 30-year U.S. bonds is again testing the 5% mark, inching closer to the 5.15% high touched in May, which is the highest level since at least 2007. The yield spread with 5-year bonds is also approaching 1 percentage point. Following Moody's downgrade of the U.S. credit rating and inflation expectations exacerbated by Trump's tariffs, the risk premiums demanded by investors for holding long-term bonds have surged, resulting in weak demand for long-term bond auctions. Wall Street speculates that the U.S. Treasury may follow Japan in reducing long-term bond issuance.

The conversation around U.S. bonds is heating up, as U.S. Treasury Secretary Yellen and JPMorgan CEO Dimon engage in a war of words. Dimon warns that cracks are emerging in the U.S. bond market, suggesting that excessive fiscal expansion and the Fed's past reckless quantitative easing could lead to a collapse in the bond market. However, fellow Wall Street figure Yellen scoffs at this notion, noting that Dimon has a history of making such predictions that never come true.