The United States’ national deficit and trade policies are causing concern on Wall Street, with investors selling off government bonds in a “Sell America” trade. The Treasury department paid more than expected to borrow $20 billion in bonds, leading to a surge in interest rates above 5%. This increase is damaging to the economy, as higher bond yields lead to higher interest rates on mortgages and loans.
The European Central Bank warned that President Trump’s tariffs are putting the global financial system at risk. Moody’s recently downgraded the US creditworthiness due to the mounting national deficit, approaching $2 trillion. The downgrade also criticized President Trump’s budget bill and its tax cuts.
Investors now view the US as a “riskier place” for their investments, according to Winnie Cisar, global head of strategy at CreditSights. The “Sell America” trade represents a shift in narrative around US economic exceptionalism.
Source: https://www.npr.org/2025/05/22/nx-s1-5407868/sell-america-bonds-national-deficit-wall-street