Recently, there has been a rather abnormal phenomenon in the market - since the 90s, every time the Federal Reserve cuts interest rates, Treasury yields have basically followed. But this time? Not at all.

The bond market has given the answer with practical actions: they don't buy the current logic of interest rate cuts at all. There is a saying that interest rate cuts can lower yields, which in turn lowers the cost of mortgages and credit cards. The market obviously doesn't see it that way.

More subtly, as the Fed chairman may face personnel changes, a potential risk has surfaced: if policymakers are pressured to engage in aggressive easing, they may self-destruct. Outcome? Inflation is already running at a high level, and such a toss may be even more uncontrollable, and yields may have to soar upward.

The data is here: Since September last year, the federal funds rate has been cut by 150 basis points from a high of more than 20 years and is now in the range of 3.75%-4%. Traders generally expect another 25 basis points cut on Wednesday, and there may be two similar operations next year, with the goal of bringing the benchmark rate to 3%-3.25%.

But here comes the key problem - the yields on long-term treasury bonds, which really affect the cost of borrowing money for ordinary people and businesses, have not gone down at all. 10-year Treasury yield? Instead, it rose almost half a point to 4.1%. The 30-year period is even more exaggerated, soaring by more than 0.8 percentage points.

According to common sense, short-term policy interest rates should move, and long-term bond yields should follow. Even if you look back at the two non-recessional interest rate cut cycles in the past 40 years, you have not seen this differentiated trend.