Global Bond Market Hit Hard as U.S. Fiscal Worries Grow
A global bond sell-off is gaining momentum as investors react to rising fiscal concerns in the U.S.
The latest triggers include Moody’s downgrade of U.S. creditworthiness and President Donald Trump’s controversial tax bill, which could increase federal debt by as much as $5 trillion.
These developments have investors rethinking long-term risk exposure. “Events like downgrades or deficit-heavy budgets force markets to reprice long-end debt,” said Rong Ren Goh, a fixed income portfolio manager at Eastspring Investments.
U.S. Treasurys Suffer Sharp Losses
The backlash is most visible in the U.S. Treasury market. The 30-year yield has surged past 5%, a level last seen in late 2023, and currently sits at 5.088%. Meanwhile, the 10-year yield has jumped over 15 basis points since the start of the week.
“Investors are showing little love for long-duration bonds right now,” said Steve Sosnick, Chief Strategist at Interactive Brokers.
Vishnu Varathan of Mizuho Securities was more blunt: “Markets don’t find Trump’s ‘big, beautiful tax bill’ beautiful at all. U.S. Treasurys were crushed in an ugly sell-off.”
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Shift Away From U.S. Assets Boosts Foreign Bonds
This is part of a broader trend. April saw a major exodus from American financial assets, with capital flowing instead into safer options in Japan and Germany.
Market analysts say the declining confidence in U.S. fiscal discipline is pushing global investors to seek refuge in more stable debt markets.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
