The bond market responded sharply. The benchmark 10-year Treasury yield surged 9 basis points to 4.486%, capping a historic weekly climb of over 50 basis points—the largest since 2001. Traders speculated that China and Japan were reducing their Treasury holdings, reversing traditional safe-haven flows.
This Treasury selloff prompted scrutiny from the White House, with officials acknowledging that market moves may have influenced recent trade recalibrations. Analysts noted that rising yields undermine low-cost financing—central to current U.S. fiscal strategy—thereby heightening political sensitivity.
Confidence in U.S. Assets Erodes
Investor sentiment deteriorated further following weak consumer confidence data and the highest 12-month inflation expectations since 1981. Fed officials, including Neel Kashkari, highlighted the unusual trend of a weakening dollar despite protectionist policy—suggesting that global confidence in U.S. economic leadership may be slipping.
