Tue Apr 15 06:42:01 UTC 2025: ## Trump’s Tariffs Trigger US Treasury Sell-Off, Raising Economic Concerns

**Washington D.C.** – A sharp sell-off in US Treasury bonds is fueling anxieties about the long-term health of the American economy and the reliability of the US government’s ability to service its debt. The unprecedented drop in bond prices, occurring simultaneously with stock market losses, has alarmed economists. This contrasts with the usual inverse relationship, where bond prices rise during stock market declines as investors seek safe haven assets.

The sell-off, which saw the yield on the 10-year Treasury bond spike to 4.58 percent (up from under 3.9 percent the previous week), followed President Trump’s announcement of sweeping tariffs on numerous trading partners. This prompted investors to dump longer-maturity Treasuries, despite the concurrent stock market losses. The move is interpreted as a significant lack of confidence in the US government’s ability to repay its massive national debt ($36.22 trillion).

The rising yields make borrowing more expensive for the US government, corporations, and citizens, potentially escalating into a broader economic crisis. Professor Anastassia Fedyk of UC Berkeley’s Haas School of Business called the situation “a pretty serious indicator of concern,” emphasizing the uncertainty surrounding the US economy’s direction.

President Trump’s subsequent 90-day pause on most tariffs, announced amid the market turmoil, offered a temporary reprieve. However, the uncertainty remains, with ongoing investigations into semiconductor and pharmaceutical imports hinting at further potential tariffs. The 145 percent tariff imposed on China last week and the unclear future of tariffs on other countries after the 90-day pause contribute to the instability.

While Treasury Secretary Scott Bessent downplayed the sell-off and highlighted the Treasury’s available tools, including debt buyback programs, experts warn that the Federal Reserve’s ability to respond is hampered by the unpredictability of the President’s trade policies. The potential for China, the second largest foreign holder of US government debt, to strategically unload its holdings adds to the precarious situation. The volatility underscores the significant impact of trade policy uncertainty on investor confidence and the broader US economy.

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