The US Treasury market went through a wild ride this past week, with investors actually selling off government bonds in a frantic way, which then pushed yields up to levels we haven’t seen in months. As of right now, Treasury yields have somewhat settled down, but they had shot up dramatically earlier. Note that the 10-year note jumped from below 4% to 4.51% in just a matter of days.

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Exploring the Bond Market’s Response to Trump and U.S. Treasury Yields

Market Disruption

The US Treasury market, which is valued at around $29 trillion, saw bid-ask spreads basically double from what they normally are during the worst of the crisis. There was also this really unusual situation where both stocks and bonds were falling at the same time. This raised serious concerns about market stability. Even more, it reminded a lot of people of that bond market crash back in March 2020.

Bill Campbell, who works as a portfolio manager for the DoubleLine global bond strategy, noted:

“With the selling that happened overnight in Asia and then through Europe, you started to get the warning signs that there was potentially stress building up in the system, and had it continued, then you start to run the risk that bigger things would happen.”

Well, the interesting part is that the bond market selloff influenced what the White House decided to do next. In what was a surprise move, President Trump announced a pause on tariffs on Wednesday. This immediately gave some relief to the stressed treasury market.

Trump was aware of the fact that:

“People were getting a little queasy. The bond market is very tricky.”

And then after he announced the tariff pause, Trump was clear about the fact that:

“The bond market now is beautiful.”

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Long-Term Concerns

Even though there was some immediate relief after the tariff pause announcement, there are still plenty of concerns floating around about lasting damage to the US Treasury market. This unusual situation where stock prices and bond prices were falling together has got people questioning whether US government bonds will still be seen as the ultimate safe-haven asset going forward.

Deutsche Bank analysts warned:

“The damage has been done… both in terms of relative economic growth outcomes and foreign investor willingness to fund the U.S. external deficit.”

Also Read: China Escalates Trade War: US Goods Face 125% Tariff Starting April 12

Global Impact

The turmoil in the US Treasury market didn’t just stay contained to the US. It actually spread pretty quickly around the world, and also pushed up treasury yields and borrowing costs in a lot of other countries too. For example, Japan’s 30-year bond yield jumped to its highest level in 21 years, while over in Britain, their 30-year yields reached levels that hadn’t been seen since around 1998.

Westpac analysts offered this stark assessment:

“The age of U.S. exceptionalism (at least financially) has come to an end. The ultimate risk-free curve, of US Treasuries, the ‘golden collateral’, the actual instrument any investor from Tennessee to Tokyo can buy, is being challenged.”

The US Treasury market went through a wild ride this past week, with investors actually selling off government bonds in a frantic way, which then pushed yields up to levels we haven’t seen in months. As of right now, Treasury yields have somewhat settled down, but they had shot up dramatically earlier. Note that the 10-year note jumped from below 4% to 4.51% in just a matter of days.

Also Read: Shiba Inu Prediction: AI Sets SHIB Price For April 20, 2025

Exploring the Bond Market’s Response to Trump and U.S. Treasury Yields

Market Disruption

The US Treasury market, which is valued at around $29 trillion, saw bid-ask spreads basically double from what they normally are during the worst of the crisis. There was also this really unusual situation where both stocks and bonds were falling at the same time. This raised serious concerns about market stability. Even more, it reminded a lot of people of that bond market crash back in March 2020.

Bill Campbell, who works as a portfolio manager for the DoubleLine global bond strategy, noted:

“With the selling that happened overnight in Asia and then through Europe, you started to get the warning signs that there was potentially stress building up in the system, and had it continued, then you start to run the risk that bigger things would happen.”

Well, the interesting part is that the bond market selloff influenced what the White House decided to do next. In what was a surprise move, President Trump announced a pause on tariffs on Wednesday. This immediately gave some relief to the stressed treasury market.

Trump was aware of the fact that:

“People were getting a little queasy. The bond market is very tricky.”

And then after he announced the tariff pause, Trump was clear about the fact that:

“The bond market now is beautiful.”

Also Read: Bitcoin Beats Gold? 21M Cap Could Trigger a Supply Shock

Long-Term Concerns

Even though there was some immediate relief after the tariff pause announcement, there are still plenty of concerns floating around about lasting damage to the US Treasury market. This unusual situation where stock prices and bond prices were falling together has got people questioning whether US government bonds will still be seen as the ultimate safe-haven asset going forward.

Deutsche Bank analysts warned:

“The damage has been done… both in terms of relative economic growth outcomes and foreign investor willingness to fund the U.S. external deficit.”

Also Read: China Escalates Trade War: US Goods Face 125% Tariff Starting April 12

Global Impact

The turmoil in the US Treasury market didn’t just stay contained to the US. It actually spread pretty quickly around the world, and also pushed up treasury yields and borrowing costs in a lot of other countries too. For example, Japan’s 30-year bond yield jumped to its highest level in 21 years, while over in Britain, their 30-year yields reached levels that hadn’t been seen since around 1998.

Westpac analysts offered this stark assessment:

“The age of U.S. exceptionalism (at least financially) has come to an end. The ultimate risk-free curve, of US Treasuries, the ‘golden collateral’, the actual instrument any investor from Tennessee to Tokyo can buy, is being challenged.”