The Simple Explanation for This Week's Treasury Market Mayhem

[SunSeeker]

The immediate suspects include somewhat plausible ideas revolving around complex trading strategies employed by hedge funds to conspiracy theories focused on nefarious dealings by foreign governments.

But the answer might be far simpler: U.S. government debt is doing badly because, well, investors don’t want to buy it.At the moment, they still don’t. While the S&P 500 closed the week up 5.7% on the back of President Trump’s announcement of a 90-day tariff pause, long-term U.S. government debt hasn’t recovered. The yields on 10-year and 30-year debt hovered around 4.5% and 4.9% Friday, respectively.

An aversion to buying Treasurys at the moment is actually pretty easy to understand. The Trump administration’s erratic tariff policies have created so much uncertainty that investors have been reluctant to make any directional guesses about where the U.S. economy would be in 10 years. Higher-conviction moves, which have involved pricing in a possible recession and tariff-induced inflation, have concentrated on short-term bonds.

https://www.wsj.com/finance/investing/the-simple-explanation-for-this-weeks-treasury-market-mayhem-9351f339?mod=mhp

[Nonnia Bisnez]

1. Treasuries are backed by the trust in the US economy.

That trust is in short supply these days.

[Frasier Balzov]

2. The anticipated value of the dollar

is also an important factor in the desirability of U.S. treasury securities.

[usonian]

3. Wait until they're backed by "full faith and trust in Bitcoin"

Oops.

[modrepub]

4. When You're Hell Bent On Eliminating All Trade Deficits

You're really eliminating foreigners' appetite for reinvesting their gains in US financial instruments. That's been the MO for decades. We buy stuff from overseas and those selling stuff to us reinvest their gains in stocks, bonds and US treasuries. Not anymore according to the bond market.

[SunSeeker]

5. This is going to make our interest payments on our national debt a lot higher.

And Trump will use it as an excuse to cut more government services. Which will make America suck more, and make even fewer people want to invest in us. It's a downward spiral from Hell.

[David__77]

6. In February Trump asserted that the US may default on its debt

Countries would be crazy to be buying US debt now

https://finance.yahoo.com/news/trump-says-u-might-less-221932449.html

[SunSeeker]

7. Yes, it's infuriating how he is destroying our country.

[Meowmee]

8. What he did was insider trading though too

I won’t buy US bonds now, who knows what will happen in the coming days, weeks, months.