Investors sell off US Treasuries
By Abigail Townsend
Date: Wednesday 09 Apr 2025
(Sharecast News) - The sell-off in safe-haven US Treasuries extended on Wednesday, as global markets reacted to Donald Trump's tariff regime coming into effect.
Despite being a benchmark safe-haven asset, the 10-year US Treasury yield surpassed 4.5% on at one point on Wednesday, before settling back to 4.37%.
Earlier in the week, the yield was less than 3.9%.
The 30-year yield was similarly volatile, and briefly broke past 5%.
Analysts said the highly unusual swings suggested that investors were losing confidence in US sovereign debt, as well as shifting into cash.
There was also speculation that a number of countries, including China, were dumping US Treasuries as part of a retaliatory response to the tariffs.
Trump has repeatedly backed his swingeing regime, despite the imminent global trade war causing carnage across global markets. Equities and oil prices have tumbled while gold has surged.
However, the sell-off in US debt could prove more problematic for the White House, as low Treasury yields is a key policy aim of the Trump administration.
Russ Mould, investment director of AJ Bell, said: "Investors are looking for any indication that the US government might blink in the face of the turmoil. For now, there are no signs of willingness to back down or hit pause on tariffs.
"The longer the situation persists, the harder and more complex it will be to unpick.
"A trend which will be watched closely is an apparent loss, whether temporary or otherwise, of US assets' safe-haven status.
"Treasures sold off heavily amid some speculation China and other parties are dumping their holdings as a retaliatory tool."
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The allure of US Treasuries as a safe-haven asset appears tarnished right now.
"Investors appear to be starting to pull money out to brace for what could come next. Government bonds have been more in demand as investors sought safety, but the moves suggest that some positions are being exited to cover losses elsewhere in the markets and that liquidity is being squeezed.
"The sharp move upwards come even though bets that the Fed will cut interest rates have increased [which] would usually put further downwards pressure on yields."
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