Long-term Treasury yields are looking stretched—or rather, not stretched enough. Asset managers are flagging that the U.S. term premium (the compensation you get for lending money long-term) has compressed to unusually tight levels. Here's the thing: if Washington gets policy wrong, it won't take much to crack this calm. A policy stumble could rapidly reverse the current positioning, sending yields sharply higher.

The 10-year yield trajectory remains a key watch. With rate expectations still fluid and inflation dynamics uncertain, those holding Treasurys for the long haul are basically betting on things staying orderly. Spoiler alert: markets don't always cooperate. When term premiums finally reprice, the moves tend to be abrupt.