From Yahoo Finance: 2025-04-10 06:08:00

U.S. President Trump paused heavy tariffs on multiple countries after financial market turmoil, including a selloff in the $29 trillion Treasury market. Bond yields surged, then fell to 4.27%. Higher Treasury yields impact mortgages and corporate loans, raising borrowing costs globally, affecting countries like Britain and France.

The Treasury market is vital for global financial stability. A sharp selloff in Treasuries caused by Trump’s tariff news raised borrowing costs, impacting mortgages and corporate loans. Yields on U.S. junk bonds surged nearly 1%, with global borrowing costs rising, affecting countries with high debt levels like Japan and Britain.

Hedge funds unwound bets during the Treasury selloff, leading to dislocation signs. Bid-ask spreads widened, resembling the 2020 “dash-for-cash.” The scale of the selloff drew parallels with Britain’s 2022 mini-budget crisis. Basis trades unwinding and concerns about China offloading U.S. Treasuries may have exacerbated the selling.

Bond vigilantes, debt investors seeking fiscal discipline, are concerned about erratic policymaking’s consequences. The recent bond market selloff is seen as a sign of investor concern. Yardeni Research called them the only players with a 100% success rate in U.S. markets, expressing worry over policy unpredictability.

Read more: Explainer-What just happened in the U.S. Treasury market?