U.S. Treasury bond prices are plunging amid rising global recession fears, as Treasury Secretary Scott Bessent described Wednesday’s developments as “deleveraging convulsions.” The dramatic selloff has driven borrowing costs to levels not seen in years, fueling concern of a looming debt crisis.
Yields on 10-year Treasury bonds jumped above 4.5%, while 30-year bonds rose past 5%, compared to less than 4% just days ago. These rapid changes are significant in the normally stable bond market and are linked to market reactions to Trump’s sweeping tariffs.
Columbia historian Adam Tooze warned the current conditions mirror those that triggered the March 2020 Treasury market crisis. Analysts say hedge funds are exiting the “basis trade,” a normally safe strategy using high leverage, contributing to the sharp bond price drop.
International investors are also shifting away from U.S. assets, weakening both stocks and bonds. ING analysts dubbed the shift a “sell America” trend.
Analyst Jim Bianco summed up the market chaos: “Markets are fragile. Tariffs broke the bond market.”
Sources
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