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Steve Grasso, director of institutional sales at Grasso Global, highlights that Japan's 10-year government bond yield has reached 3 percent for the first time since 1996. He adds that Japan still holds $1.12T in U.S. Treasuries, while the U.S. 10-year yield stands at approximately 4.78 percent. Grasso points out that carry trade conditions have become less favorable. He identifies likely beneficiaries as banks, energy, and gold, while noting that mega-tech, REITs, and utilities may face headwinds.
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Grasso has previously warned that the Federal Reserve’s sustained high rates are accelerating U.S. deficit growth, citing recent weak inflation readings in CPI, PPI, and PCE data. He has also emphasized the Federal Reserve’s statutory mandate to promote maximum employment, stable prices, and moderate long-term interest rates under Section 2A of the Federal Reserve Act. These comments reflect his continued focus on both U.S. monetary policy and its implications for markets.