Bond market finishes one of worst weeks in decades

[BumRushDaShow]

Source: The Hill

04/11/25 6:33 PM ET


The U.S. Treasury bond market finished one of its worst weeks in decades on Friday after a chaotic series of days that saw President Trump announce a pause on his widest ranging tariffs yet. The most attention-grabbing statistic was with the 30-year bond yield, the amount that purchasers make for the bond they bought.

The yield saw its largest one-week increase of any point since 1982, finishing the week at 4.87 percent after having peaked just above 5 percent earlier Friday. The 10-year bond yield also experienced a significant increase, settling just under 4.5 percent for its largest weekly increase since 2001. Yields for bonds of other lengths of time also saw significant increases this week.

The bond market spooked economists even more than the stock market did in its reaction to Trump’s tariffs, which were set to impose higher varying rates on about 60 countries beyond the baseline 10 percent tariff that is still in place on all countries around the world.

This is because the bond market — in which the federal government sells U.S. Treasury bonds to individuals, companies and other governments — typically has maintained stability during times of economic turmoil. But observers saw demand for U.S. Treasury bonds plummet and interest rates rise amid Trump’s tariff plans.

Read more: https://thehill.com/business/5245617-bond-market-trump-tariffs-economy/

[BoRaGard]

1. "We did that." - G.O.P.

[WSHazel]

2. It is not quite time to panic

But it is getting close to time to panic. If there is really a slow motion run on the U.S. dollar underway, and yields going up as the dollar loses value indicates there is at least a shift happening, then the massive deficit party of the last 24 years is coming to an end, which will suck for all of us because spending will be slashed and taxes will go up, bigly.

[Scrivener7]

3. And that's just the beginning.

[progree]

4. An example of the sad bond market: Vanguard Intermediate Term Treasury fund only 1.40%/yr since 1/2015

Last edited Sat Apr 12, 2025, 05:44 PM - Edit history (3)

and volatile. A good graph of that volatility, e.g. Vanguard IntermediateTerm Treasury Admiral VFIUX
https://www.morningstar.com/funds/xnas/vfiux/performance

(Updated below for 4/11/25 ending value. Later: updated the time frame to a more accurate 10.2738 years)

plus a table of total annual returns by year. Negative numbers are in parenthesis ( )
2015 1.61%
2016 1.29%
2017 1.67%
2018 1.10%
2019 6.39%
2020 8.31%
2021 (2.19%)
2022 (10.34%)
2023 4.18%
2024 1.48%
YTD 2.10%

which shows some of the volatility and the piss-poor returns.
Since the beginning of 2015, its total return is cumulatively only 15.39%
(A $10,000 investment grew only to $11,539 in those 10.2738 years)
which comes to an average annualized total return of only (1.1539^(1/10.2738) -1)*100% = 1.403%/yr

And as far as purchasing power, it is way underwater:
CPI: https://data.bls.gov/timeseries/CUSR0000SA0
1/2015: 234.747
3/2025: 319.615
So, consumer costs rose 36.15% during that period.
The purchasing power of the $10,000 bond portfolio is now only $8,475 (=234.747/319.615 * $11,539), a 15.2% decrease.

[spinbaby]

5. My retirement is mostly in "safe" bond funds

My account’s value is down a little over 3% in one week.