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Global uncertainty gave markets an early jolt this week, but it didn't last. Heading into the World Economic Forum in Davos, Switzerland, markets were braced for worst-case outcomes around global policy coordination, growth and geopolitical risk. Fears surfaced early Tuesday, triggering selling pressure in the markets. As the week unfolded, however, it became clear that the most disruptive scenarios had been avoided. A framework agreement on Greenland, outlining initial principles for cooperation, with key details still to be negotiated, helped ease concerns. As a result, stock markets staged a sharp rebound, erasing early losses and closing the week with solid gains.

The more meaningful pressure on US rates, however, came from Japan, not Greenland.

Japan's 10-year government bond yield surged to levels not seen since 1998, and that move rippled through global fixed income markets. Higher Japanese yields matter because global capital is mobile. When yields rise overseas, it competes directly with US Treasuries, putting upward pressure on rates here at home.

The spike in Japanese yields is fundamentally a bond-market protest. Investors are reacting negatively to Japan's fiscal outlook, particularly a plan that offers no credible path to stabilizing or paying down debt. With no clear funding solution, bond investors are demanding higher yields as compensation. That loss of confidence is what pushed yields higher, and why the move is being felt well beyond Japan's borders.

Back at home, the US growth story continues to do the heavy lifting. We received the third and final reading of GDP, which came in at a very strong 4.4%. Even more important than the headline number is the composition: growth was driven by the private sector. That matters because the US faces its own debt and deficit challenges, and the only sustainable way to address them is through economic growth, not austerity or financial engineering.

Looking forward, the growth tailwinds remain firmly in place. Atlanta Fed GDPNow is forecasting fourth-quarter growth north of 5.0%, reinforcing the idea that momentum is carrying into 2026. Strong private sector growth gives policymakers breathing room and helps offset longer-term fiscal concerns; an important backdrop for both rates and risk assets.

Last year, 4.2% on the 10-yr Note prevented yields from improving. Back in September, the 10-yr moved beneath 4.2% and stayed there until recently. This is important, because for mortgage rates to improve meaningfully, we need to see the 10-yr move beneath 4.2% again.