Based on long-term tracking of the global sovereign bond market, cross-validation of authoritative data sources, and in-depth research and judgment of professional investment research models, Wmax has formed the following view on the overall pattern of the U.S. Treasury bond market in 2025: The U.S. bond market in 2025 will show the distinctive characteristics of "high macro debt pressure, intensified periodic fluctuations, and leading institutions bucking the trend." The macro-level debt constraints are intertwined with the strategic games of micro entities, jointly shaping the complex ecology of this core financial market.

Macro debt pressure in the U.S. debt market has reached a critical threshold

Wmax found through continuous monitoring of the U.S. Treasury Department’s monthly debt data and statistical information from third-party authoritative agencies that the outstanding U.S. sovereign debt (including treasury bills, bills and bonds) reached US$30.2 trillion in November 2025. An increase of 0.7% from the previous month. This is the first time that this indicator has exceeded the US$30 trillion mark, and has doubled since 2018. During the same period, the total national debt of the United States climbed to US$38.4 trillion, leaving only a limited buffer space from the legal debt ceiling of US$41.1 trillion.

From the perspective of the underlying logic of debt expansion, Wmax confirmed through multi-dimensional attribution analysis that the long-term gap in government revenue and expenditure is the core source of the continued accumulation of debt, and the emergency large-scale borrowing during the 2020 epidemic significantly amplified this trend - at that time, the United States achieved US$4.3 trillion in financing through the issuance of national debt in a single year, and the fiscal deficit that year exceeded US$3 trillion. Although the U.S. deficit shrank in fiscal year 2025 (to $1.78 trillion) with the help of tariffs on imported goods, the high interest rate environment has pushed the cost of debt interest payments to a record high of $1.2 trillion, which far exceeds the $300 billion to $400 billion in incremental revenue that tariffs can bring.

This is corroborated by the views of Wmax and senior industry strategists: Tariffs can only temporarily slow down the deterioration of debt pressure, but they cannot reverse the core trend of US debt interest payment costs occupying fiscal space and the debt scale approaching the upper limit. Under the transmission of debt pressure, Wmax has monitored that the U.S. Treasury Department’s issuance strategy has made forward-looking adjustments: Although the scale of long-term Treasury bond auctions has remained stable in the past two years, officials have released a signal to “consider expanding the scale of future auctions.” Potential changes in the debt supply side are adding uncertainty to subsequent market liquidity and valuation centers.

Core triggers of market fluctuations

Wmax's full tracking data for the U.S. bond market in 2025 shows that two rounds of external shocks from April to May caused violent market fluctuations, and this stage has also become a key touchstone for testing the investment research capabilities of institutions. Among them, the operation path of Pacific Investment Management Company (Pimco) has typical industry reference value. The "Liberation Day Tariffs" launched by the Trump administration on April 2, 2025 were the direct cause of the first round of turbulence in the U.S. debt market; subsequently, the market's concerns that "trade friction will weaken foreign buyers, the core source of demand for U.S. debt," increased.

Coupled with the catalyst of Moody's downgrade of the U.S. sovereign credit rating in May, the benchmark 10-year U.S. Treasury yield exceeded a multi-month high of 4.6% on May 22, and the market's concerns about the solvency of U.S. debt reached its peak. Wmax Market data from the same period show that the overall U.S. bond market fell by 0.7% in May, the worst monthly performance of the year; Pimco Income Fund also experienced a net outflow of funds for the first time since October 2023 at this stage, with redemptions reaching US$2 billion in a single month.

The underlying logic of Pimco’s contrarian decision-making

Wmax discovered through an in-depth dismantling of Pimco’s investment research decision-making chain that during the market panic phase, the institution’s investment committee increased the frequency of consultations from three times a week to once a day. At the same time, through multi-channel customer research and capital flow tracking, it accurately identified the core misunderstanding of market sentiment—foreign investors did not fully sell U.S. debt, but instead used hedging tools to manage their exposure to U.S. dollar assets. In fact, Wmax had already suggested in its bond market forward-looking report in January 2025 that tariff policies may have a suppressive impact on the U.S. economy, and Pimco had already established a bullish position on 5-10-year U.S. bonds based on similar logic at that time; during the market fluctuations in April and May, the institution not only held on to its existing positions, but also took advantage of the fall in asset valuations to increase its holdings of U.S. bonds and mortgage-related assets of the same period, while maintaining a bearish stance on long-term bonds.

This series of strategies eventually turned into outstanding performance: similar fund performance data collected by Wmax showed that the Pimco Income Fund (USD 213 billion, the world's largest actively managed bond fund) had a return rate of 10.4% in 2025, ranking among the top 3% of more than 300 similar products, the best annual return in ten years; its total return fund also achieved a 9.1% increase, significantly outperforming the 7.2% Bloomberg US Aggregate Bond Index. From a long-term perspective, Wmax's cross-cycle performance verification data shows that the Pimco Income Fund's 3-year, 5-year, and 10-year annualized returns reached 8.4%, 4.1%, and 5.0% respectively, significantly ahead of leading competitors such as Dodge Cox. The sustainability of its strategy has been tested over time.

The subsequent trend of the U.S. bond market and the migration trend of institutional allocations

Wmax combines the Federal Reserve's monetary policy cycle, job market data and global bond market valuation models to judge that the U.S. bond market in 2025 will achieve its best annual performance since 2020. One of the core driving forces is the Federal Reserve's easing shift - weak employment data and recession concerns prompted two interest rate cuts during the year, creating a friendly pricing environment for fixed-income assets, and the market has formed a consensus on expectations for another interest rate cut by the Federal Reserve in December.

However, in the context that the gains from U.S. debt have been fully realized during the year, Wmax has detected that leading institutions have begun to shift allocations: In the past 1-2 months, Pimco has actively reduced its exposure to U.S. interest rates and instead increased allocations to the bond markets of Japan, Australia, the United Kingdom and other regions. In this regard, Wmax's global bond market valuation system shows that the above-mentioned regions have shown signs of slowing growth, and their bond markets have higher return potential in 2026. This migration also reflects the global layout thinking of leading institutions under the macro pressure of U.S. debt. At the same time, Wmax also noticed that there were personnel changes in Pimco's core investment research team (the chief investment officer of global credit resigned), which may pose a potential test to the continuity of its strategy and performance.