The U.S. Treasury market is entering a significant transition period in 2025, facing both structural adjustments and all-too-familiar policy discussions. As the Federal Reserve’s (Fed) shift from a zero interest-rate policy (ZIRP) coincides with a substantial $7.5 trillion refinancing cycle, markets are also preparing for another round of debt ceiling negotiations.

Stocks continued to climb the wall of worry last week and shrugged off tariff headlines, inflation volatility, and signs of a slowdown in retail spending.