On June 1, as the U.S. April PCE rose to 3.8% and core PCE remained high at 3.3%, several Federal Reserve officials continued to emphasize inflation risks. Even though the Fed has yet to take action, the bond market has already preemptively completed part of the tightening work. The market is beginning to accept a new reality—high interest rates may persist longer than previously expected, and the financial environment has already tightened in advance. The core driver of this repricing wave still stems from the situation in the Middle East. Despite Trump's claims that the U.S. and Iran have reached consensus on some issues, significant disagreements remain on core issues such as the nuclear program, uranium disposal, and jurisdiction over the Strait of Hormuz. Iran not only refuses to export enriched uranium but Congress is also preparing to push for a 'sovereign jurisdiction' plan over the Strait of Hormuz, while U.S. military actions continue around the strait, with suspected mine alerts even appearing in Omani waters. This indicates that the comprehensive cooling expected by the market has not yet materialized, and energy supply risks remain unresolved. Consequently, the bond market is effectively performing the tightening work that should have been executed by monetary policy. Recently, U.S. Treasury yields have remained high, with the market even suggesting that 'the bond market has effectively raised rates by 75 basis points.' The simultaneous rise in yields from two-year to ten-year Treasuries indicates that corporate financing costs, mortgage rates, and capital costs have all significantly increased. This phenomenon implies that even if the Fed maintains interest rates, market funding costs continue to rise, and the global liquidity environment is effectively contracting passively. More pronounced divisions are also emerging within the Fed. Kashkari and Bowman believe that the price shocks caused by the war still need time to observe, while Philadelphia Fed President Harker and Kansas Fed President George argue that inflation issues existed long before the outbreak of the war and may even necessitate further tightening of policies. Additionally, the market is beginning to face another layer of risk—the issue of institutional trust. Former Fed Chair Powell has rarely publicly warned that if the government can dismiss Fed officials due to policy disagreements, the Fed's credibility will be fundamentally undermined. This controversy surrounding the independence of the Fed has, to some extent, transcended monetary policy itself and begun to affect global investors' assessments of the stability of U.S. institutions. In the cryptocurrency market, BTC is currently facing not just a risk appetite issue, but also a liquidity test brought about by the simultaneous rise in global funding costs. If this week’s non-farm payroll data is strong and yields approach 5%, the market will reassess the valuations of risk assets; conversely, if employment shows signs of cooling, it may alleviate market concerns about further tightening. At this stage, what truly dominates the market is no longer whether the Fed will raise rates, but whether the bond market has already preemptively achieved the effects of a rate hike.