From Yahoo Finance: 2025-04-09 12:57:00

U.S. Treasury yields have surged due to a global market sell-off sparked by President Trump’s tariff plans. While higher yields can be good for investors, it’s important to understand why they have suddenly jumped, raising concerns before investing in Treasury bonds or funds.

Yields on Treasury bonds are inversely related to the bond’s price, rising as prices fall. With rising yields during a market sell-off, it’s unusual; typically, Treasury yields fall as investors seek safety. This time, stock prices are falling while Treasury yields are rising, causing uncertainty.

Analysts suggest hedge funds may be selling Treasuries to meet margin calls or investors are moving to cash due to tariff uncertainties. Larger concerns arise if countries like Japan, China, or the UK start selling U.S. Treasuries, impacting investors and Treasury prices further.

The traditional safe harbor image of Treasuries is in question amid market uncertainty, potentially leading to further price decreases. Holding Treasuries to maturity may not be affected, but selling early could result in losses, affecting Treasury-focused funds as well. Invest cautiously in uncertain times.

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For more details, refer to “Read This Before You Jump on Rising Treasury Yields” published by The Motley Fool.

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