You wouldn’t normally expect market yields to surge higher at a time when the Federal Reserve just increased the size of its interest rate cuts from 25 basis points to 50 basis points. Yet this is exactly what has happened. Astonishingly, the yield of the 10-year US government bond has risen by more than 60 basis points from its level on Sept. 18, the day of the last Fed policy meeting. And the increase in yields has occurred right across all the major maturities.

While most analysts agree on the list of potential contributors to this unusual development, there is little consensus on their relative importance. This matters for what we forecast about the future wellbeing of the economy and for the sustainability of this year’s impressive stock market performance. Fortunately, the next eight days are set to bring clarity to a rather confusing situation.

Let’s start our review with the run-up to the last Fed policy announcement which, itself, was rather unusual. The widely held expectation that the Fed would cut by a quarter point was suddenly upended by what was seen as two heavily Fed-influenced articles indicating that a half-point reduction was a more likely outcome. The fact that this “leak” took place during the Fed’s “blackout period” added to what already was an odd situation. And, sure enough, in what  Bloomberg Surveillance anchor Jonathan Ferro called “Powell’s Draghi moment,” the Fed announced a 50 basis-point move shortly thereafter.

Rather than welcome this cut as indicative of a more dovish policy posture, markets have taken yields higher right across the yield curve: At the time of writing, to 4.14% for the 2 year, 4.30% for the 10 year, and 4.55% for the 30 year. Some analysts are even suggesting that the 10-year could spike further to above 5%.

Four main reasons are commonly cited for the change in the configuration of yields that have a significant impact on many other countries:

• A series of data surprises that suggests that the US economy is stronger than what was the consensus forecast.

• A move in the political “betting markets” favoring not just former President Donald Trump’s chances at the election but also a red sweep that could push the door wide open for the imposition of significant trade tariffs.

• The policy back-tracking that has become apparent in signals from Fed officials after Sept. 18, including in the minutes released in mid-October.

• Indications of weaker foreign buying interest in US treasury bonds.

While most agree on this set of potential contributors, all of which push traders to a higher terminal rate for the Fed and a slower journey there, there is little agreement on their relative weights. This matters for economic and market prospects.

Economic wellbeing would be well served by continued US growth and investment exceptionalism, especially at a time when China and Europe are struggling. By bolstering corporate earnings, this would also help sustain the impressive stock market gains that include a 22% return for the S&P so far in 2024.

Indications of another round of flip-flopping in Fed forward policy guidance would, judging from recent history, either be neutral or somewhat negative. Much would depend on the extent to which it adds to general uncertainty and amplifies both economic and market volatility.

An erosion in foreign buying of US government bonds would come at a time when the other once-reliable purchaser, the Federal Reserve, is reducing its holdings rather than adding to them. It would coincide with high bond issuance associated with 6% of GDP plus budget deficits that shows no sign of serious moderation, together with significant government and corporate refinancing needs.

Quite a few economists worry that the potentially most troublesome possibility for the economy and markets would be a sudden surge in trade tariffs that is not accompanied by measures that compensate for the immediate inflationary impact. Should such tariff increases materialize — and it is a big if — they could lead to higher prices that particularly hit lower income households already suffering from the exhaustion of their pandemic savings and an increase in credit card balances and other debt burdens.

The next eight days will provide analysts with a lot more information to assess the relative importance of these factors, both individually and collectively. They will be paying particularly attention to the monthly jobs report and the JOLTs data, a host of corporate earnings, the outcome of the elections and the next Fed policy meeting. Judging from market indicators, few are willing to bet big on any particular configuration – that is, for now.

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic advisor at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”