US government bonds are seeing a sudden sell-off, sparking fears of dwindling investor confidence in America as a safe place to store money. The market shift is attributed to concerns about the stability and predictability of the US economy.
Investors who normally flock to Treasury bonds during economic downturns are instead selling them, with the 10-year yield reaching its highest point this week at 4.58%. Experts warn that this trend could have significant knock-on effects, including higher interest rates on mortgages, car financing, and other loans.
“The fear is the US is losing its standing as a safe haven,” said George Cipolloni, fund manager at Penn Mutual Asset Management. “Our bond market is the biggest and most stable in the world, but when you add instability, bad things can happen.”
The sell-off comes amidst growing concerns about President Donald Trump’s trade policies and their impact on investor confidence. Even with a 90-day tariff pause, investors are still wary of the US economy.
Analysts predict that the bond market’s reaction to US economic policy is more significant than previously thought. “We’re not sure any of the tools remaining in Trump’s toolkit will be sufficient to fully staunch the bleeding,” wrote Sarah Bianchi and other analysts at investment bank Evercore ISI.
The sell-off has sparked debate among experts about the underlying causes, including speculation that China may be dumping US government bonds in retaliation. However, some believe it is part of a broader trend where investors are seeking safer assets due to growing concerns about the US’s reliability as a global partner.
As a result, ordinary Americans could face higher borrowing rates and reduced economic confidence. The bond market’s influence on investor decisions highlights its importance in shaping the US economy and the need for policymakers to address underlying issues.
Source: https://www.france24.com/en/business/20250412-investors-dump-us-government-bonds-faith-america-falters-tariffs-trump