Treasury Yield 5% Driver Sandbox

Macro Catalysts 4-Factor Decomposition

Scenario Presets

Fed Policy Rate Expectation 3.80%

Market anticipation of terminal funds rate over monetary cycle

2.0% (Cuts) Neutral ~3.0% 6.0% (Restrictive)

Inflation Expectation (10Y BEI) 2.80%

10-year breakeven inflation rate & sticky service pressures

1.5% Target 2.0% 4.5%

Term Premium (ACM Model) 0.90%

Compensation demanded by investors for long-duration risk

-0.5% (QE era) +1.0% (Normal) +2.5% (High volatility)

Fiscal Supply & Auction Concession 1.10%

Treasury net issuance volume and primary dealer concession risk

0.0% (Balanced) 1.0% (Deficit Surge) 2.0% (Severe Glut)

Market Impact & Stress Horizon Live Curve Model

10-Year Treasury Yield

4.95%

5 bps below 5.00%

5% Threshold Status

Approaching 5%

Critical resistance

30Y Fixed Mortgage Est.

7.15%

Yield + 220 bps spread

US Treasury Yield Curve (2Y — 30Y)

Simulated Curve

5.00% Threshold

Equity Valuation Impact -0.8x P/E

High Pressure (P/E compression)

Discount rates spike equity risk premium hurdles, hitting growth tech and debt-leveraged multiples.

Bond Portfolio Impact -7.1% Return

Capital Loss Pressure

Aggregated 10-year duration sensitivity (~7.5 yrs) causes meaningful bond benchmark mark-to-market drawdown.