AI anxiety emotion lingers, long-term US bonds are favored by investors, yields fall to multi-month lows.

In recent times, the US bond market has continued to strengthen, with buying interest noticeably flowing into key maturity types in the US Treasury market with a total value of up to $30 trillion. Lawrence Gillum, Chief Fixed Income Strategist at LPL Financial, pointed out that this long-term rise in US bond prices is partly due to concerns in the market about the potential impact of artificial intelligence (AI) on the US job market. Gillum believes that the recent decline in long-term bond yields to a certain extent reflects investors' anxiety about the potential "disruptive" nature of AI. In other words, concerns surrounding AI are driving bond market yields lower. Data shows that on Thursday, the US 10-year Treasury bond yield closed below 4.02%, at 4.015%, hitting its lowest level since November 26 of last year. The 10-year Treasury bond yield is generally regarded as the pricing benchmark for 30-year fixed mortgage rates. On the same day, the 30-year Treasury bond yield fell below 4.7%, at 4.665%, marking the lowest level in the past three months. It is worth noting that this round of yield decline did not accompany the release of major economic data or other significant events unrelated to AI. Since January, the trend of continuously falling long-term yields has spread to the housing financing sector. According to Freddie Mac data, the newly issued 30-year fixed mortgage rates have dropped to below 6%, a first in three and a half years. Generally speaking, US Treasury yields are influenced by multiple factors, including economic growth and inflation prospects, Federal Reserve interest rate expectations, as well as rising geopolitical risks in the Middle East and other regions. But the current market environment is quite unique. On one hand, the overall performance of the US economy remains strong, and on the other hand, market expectations for the next rate cut by the Federal Reserve have been pushed back to July. In addition, the US and Iran are negotiating on nuclear issues in Geneva, with reports suggesting a possible agreement. In this context, the continuous decline in long-term yields remains intriguing. Despite mixed recent economic data, most US companies have not yet seen large-scale layoffs, and the job market remains in a cycle of low hiring, low firing. As long as employment remains stable, lower mortgage rates help alleviate the pressure on housing affordability. However, concerns about job replacement due to AI are still quietly brewing. Gillum mentioned in a phone interview that there is a continuous interest in the bond market related to job replacement caused by AI, and the recent decline in yields is closely related to this. He pointed out that the bond market performance on Thursday "seems to be a continuation of this trading logic". Additionally, traders seem to be more focused on the deflationary effects that AI may bring, rather than the risks of potential inflation pressures in the coming years. In contrast to the bond market, on Thursday investors continued to weigh the winners and losers of the AI theme in the stock market. The performance of the three major US stock indices differed, with the Dow Jones Industrial Average rising slightly by 0.03%, the S&P 500 falling by 0.54%, and the Nasdaq Composite Index falling by nearly 1.2%. Market risk preference falling also reinforces the trend of capital flowing into relatively safe assets to some extent.