Amid soaring oil prices and escalating geopolitical conflicts, the US bond market displayed a series of concerning signals on Thursday, prompting some investors to draw parallels with the period preceding the 2008 financial crisis. As markets repriced inflation and interest rate trajectories, both bond and stock markets faced simultaneous pressure, leading to a rapid increase in macroeconomic risks.

The immediate trigger for this market turbulence was the sharp rise in energy prices. Due to escalating military actions between the US, Israel, and Iran, international oil prices continued to climb, with Brent crude briefly surpassing $119 per barrel and WTI crude temporarily exceeding the $100 mark. This energy shock not only boosted inflation expectations but also intensified concerns about stagflation, reigniting the possibility of future interest rate hikes by the Federal Reserve.

Unlike previous patterns, US Treasuries, traditionally considered a safe-haven asset, did not see sustained gains as market risks intensified. Instead, they experienced selling pressure. The yield on the highly interest-rate-sensitive 2-year Treasury note surged to nearly 3.96%, remaining persistently above the Fed's policy rate range of 3.5% to 3.75%. This anomaly suggests that markets are betting on further interest rate increases ahead, rather than anticipating an easing cycle.

Concurrently, the bond market exhibited a classic "bear flattening" structure, where short-term yields are rising faster than long-term yields, causing the yield curve to flatten. The spread between the 2-year and 10-year Treasury yields has narrowed from approximately 74 basis points in early February to around 45 basis points. This pattern is typically interpreted as a signal of deteriorating economic prospects and tightening monetary policy.

Notably, three key signals are currently present simultaneously: oil prices above $100 per barrel, the 2-year Treasury yield exceeding the policy rate, and a bear-flattening yield curve. Historical data indicates that the last time all three signals appeared together was in the late spring of 2008, months before the collapse of Lehman Brothers triggered a global financial crisis, during which the S&P 500 index plummeted over 38% for the year.

However, market participants also note that while current conditions share similarities with 2008, they are not identical. The 2008 crisis originated from a bursting housing bubble and subprime mortgage market collapse, whereas current risks stem primarily from Middle East conflicts, energy price shocks, and emerging pressures in the private credit market.

Nevertheless, the concurrent decline in both stocks and bonds has significantly impacted traditional "60/40" asset allocation strategies. Economists suggest the primary challenge lies in the Federal Reserve's policy dilemma. On one hand, economic growth faces downside risks, with an increased probability of recession; on the other hand, rising oil prices are pushing inflation higher, making it difficult for the Fed to cut rates. As analysts note, the current environment resembles an early stage of financial system stress, with the combination of energy shocks and constrained policy leaving markets vulnerable.

In terms of market performance, all three major US stock indices closed lower on Thursday, despite a brief attempted rebound late in the session. In the bond market, the 2-year yield experienced significant volatility throughout the day, ultimately settling above 3.8%, indicating markedly increased uncertainty regarding the future path of interest rates.

The interest rate derivatives market also reflects this shift in expectations. Current federal funds rate futures indicate a 93.8% probability that rates will remain unchanged within the year, with even a roughly 6.2% chance of a rate hike before year-end. This shift implies that markets have largely abandoned bets on rate cuts.

Despite these developments, some institutions believe the situation has not yet escalated to a systemic crisis stage comparable to 2008. Analysts point out that the US banking system is more robust than it was then, and the economy's dependence on energy prices has decreased. Nonetheless, it is undeniable that under the triple pressures of oil price shocks, inflation, and policy constraints, market volatility and uncertainty are rising rapidly.