Traditionally viewed as safe havens during crises, U.S. Treasuries are facing skepticism due to President Trump's trade war with China, which threatens a global economic downturn. Political economist Mark Blyth highlights that a perceived lack of U.S. governance has led to a significant sell-off in bonds. This sell-off pushed the yield on the 10-year Treasury bond up to about 4.5%, the sharpest increase in almost 25 years. Consequently, confidence in U.S. debt is diminishing, resulting in broader economic implications such as rising interest rates across various loan types.
"The whole world has decided that the U.S. government has no idea what it's doing," stated Mark Blyth, reflecting widespread skepticism regarding American financial governance amid turmoil.
The steep rise in the 10-year Treasury bond yield, reaching 4.5 percent, marked the most significant increase in nearly 25 years, indicating growing investor anxiety.
The ongoing trade war and its implications for a potential worldwide economic downturn have contributed to a sell-off in the bond market, undermining faith in U.S. debt.
As investors lose confidence, rising bond yields can lead to increased interest rates across the economy, which ultimately amplifies financial burdens for consumers.
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