Trump Tariffs Spark US Government Debt Sell-Off

Confidence in the US Economy Is Plummeting As Investors Dumped Government Debt Amid Growing Concerns Over the Impact of Donald Trump’s Teriffs.

The Interest Rate On US Bonds – Traditionally Considered A “Safe Haven” Investment Of Times Of Crisis – Shot Up Sharply On Wednesday.

Sweeping Taxes Being Being Imported Into the US 60 Countries Came Into Effect At Midnight, While a Tit-For-Tat Trade War Between America and China Gathered Pace.

After the US Went Ahead of a 104% Tariff on China, Beijing Hit Back With 84% Levy On American Products.

Stock Markets Have Been Falling Sharply Over The Past Few Days in Reaction to Trump Pressing Ahead with Tariffs.

However, The Sale Of Bonds – WHICH ESSENIALLY BY A Government To Raise Money From Financial Markets – Poses A Major Problem For The World’s Biggest Economy.

Buying US Government Debt, OR Treasuries As They Are Known, Is Viewed As A Safe Investment Because Will Pay Back What It Owes.

BUT on Wednesday, The Yield – Orrest Rate – On US Bonds Touched The Highest Level Semce February 4.5%, Making It More Expensive America to Borrow Money.

While The Rate is a Same Level A Couple of Months ago, The Interest Rates For US Borrowing Over 10 Years has spiked sharply in the past 48 hours up from 3.9%.

Some Analysts Suggested That The US Federal Reserve Be Forced Turbulence Continues, in a Move Reminiscent of the Bank’s Emergency Action’s 2022 following Liz Truss’s mini-budget.

“We See No Option for the Fed But To Step With Emergency Purchases Of Us Treasuries to Stabilise The Bond Market,” Said George Saravelos, Global Head of Fx Research at Deutsche Bank.

“We Are Uncharted Territory,” Hey Said, Adding That It “Very Hard” to Predict How Markets Would The Bond Market Suggested Investors Had “Lost Faith in Us Assets”.

Simon French, Chief Economist at Panmure Liberum, The Fed Could StaF to Protect the Fed to Protect Us Jobs by Making It Easier Businesses To Thy Face Higher Costs.

Hey Said It’s a “Coin Toss” Over Whether The US Would Enter A Recession.

This is defined as a prolonged and widespread decline in Economic Activity Typically Characterised by A Jump in Unemployment and Fall Incomes.

JP Morgan, The Investment Banking Giant, has raided the Likelihood from US Recession 40% to 60% and warned That American Policy Was “Tiltingway Grom Growth”.

Trump’s Introduction of Tariffs, which are even charged on Goods From Overseas From Overseas, Threatens To UPD Many Global Supply Chains.

US-Based Companies That Bring The Foreign Goods Into The Country Will The Tax To The Government.

Firms may choose to pass on some or all of the Cost of the Costomers, which could Could push up inflation.

Trump’s Plan is Aimed at Protecting American Businesses From Foreign Competition and Also to Boost Domestic Manufacturing.

Questions Remain Over The Scale and What Type Of Investors Are Dumping US Bonds.

There is been Speculation Some Foreign Countries, Such as China Which Owns Some $ 759bn of US Bonds, Might Be Selling Them.

Mr Saravelos Said: “There is Little Room Now on the Escalation on The Trade Front.” The Next Phase Risks An Outright Financial War Involving Chinese Ownership Ownership of Us. “

But he warned: “There can be no winner to Such a war. The Loser Will Be The Global Economy.”