Investors interact with the new mutual tariff

The Treasury Return has declined for 10 years from its highest levels of the day after the successful bond auctioned for concerns about the demand for US debt.

The bond market – not the amazing stock market – was talking about Wall Street with low prices and produced from unusual work during times when fears of stagnation grow and usually depend on a fixed income of disturbances elsewhere.

But the returns were retreating from the highlands on Wednesday afternoon. Stop for 90 days in some definitions announced by President Donald Trump to alleviate some escalating concerns in the fixed income market.

the 10 years of treasury The return in the last 5 basis points was to 4.31 % after climbing overnight over 4.51 %. Recently last week, the return for 10 years, which helps to determine mortgage rates, has credit and auto loans’ debts, less than 3.9 %.

the Treasury bonds for 30 years It was 5.02 % overnight, an unprecedented level since November 2023. It was the last 4.715 %. the Treasury bonds for two years Nearly 17 basis points rose to 3.908 %, jumping in the afternoon trading. The upward step for short -term tables can be a sign that traders believe that the customs tariff stop will make the federal reserve less likely to reduce prices in its upcoming meetings.

One basis point equivalent to 0.01 %. The return and prices are transmitted in opposite directions.

The cover rate at an auction reached $ 39 billion in treasury bonds for a period of 10 years 2.67, which is much higher than the previous auction, which indicates strong demand. The so -called indirect represents more than 87 % of bids, indicating strong demand from holders such as foreign investors.

The return has been recovered for 10 years until the day before to reveal the Trump identification plan last Wednesday, and is currently at the highest level since February. The next Trump group kicked the definitions overnight, and sent the average on the goods imported from China to 104 %. China then Revenge early WednesdayThe world was involved in commercial turmoil. On Wednesday, Trump raised the definitions of China again to 125 %.

The White House’s commercial battle with the rest of the world led to a decrease in stock prices, as the S&P 500 lost 12 % in four days trading only amid increasing concerns of the president’s policies that help operate the recession.

Market sales and increased anxiety usually lead to contraction usually to flee investors towards bonds in the search for safety, which leads to a decrease in driving returns. But this did not happen.

the Ishaares 20+ Treasury year (TLT)A agent for long -term bond prices, more than 4 % decreased this week.

“Maybe more worrying, the US Treasury markets also faces an incredibly aggressive sale while going to pressure, adding to the evidence that it loses its traditional resort,” Henry Allen, a strategic economist in Deutsche Bank, said in a note.

Selling China and Japan?

Traders in a number of theories are looking to explain this step in bonds, from forced sale through hedge funds to obtain margin calls to more worrying speculation about their foreign owners who receive US government securities.

Treasury holders are Japan, China and the United Kingdom, and the same countries targeted by the United States with some of the highest definitions.

“This is a commercial war, and if countries can use their stock of US financial assets that have accumulated … then they can create some problems,” said David Zarfis, the chief strategy of the market in Jeffrez, on CNBC.Travel all over the world” Wednesday.

Wednesday auction showed that they do not use this alleged nuclear option yet. But the two countries may have no choice but to have fewer US government bonds if Trump succeeds in reducing the American trade deficit, as this will lead to sending Americans abroad to pay the price of goods. This means less than dollars for countries to buy the cabinet.

Reverse results on the White House

The highest step in revenue is a problem for the Trump administration and federal reserve studies. The White House for a while had taken consolation that the arrangement of a turbulent tariff was at least reduced rates, providing a temporary store for consumers. But then she wore this week.

“The Trump administration officials were receiving credit for the recent decline in bond returns and interest rates on the mortgage,” said Edinini from Yardini’s research in a discussion on Tuesday evening. Unfortunately, the return of the treasury bonds increased for 10 years. “

Yardini added: “Why does this happen? Investors with fixed income may begin to worry that the Chinese and other foreigners may start selling US Treasury bonds,” Yardini added.

Meanwhile, the Federal Reserve may be reluctant to reduce official lending rates, currently by 4.25 % to 4.50 % for federal funds, if the customs tariff around the world is strengthened by inflation. Her hand may be forced if the rates continue to rise and the recession fears grow.

Nevertheless, although the reduction of prices will affect short -term rates, it can lead to counterproductive results and provide a greater rise in long -term prices that are determined in the open market, where traders speculate that Floser Fed will lead to more long -term inflation.

Trump at the White House said on Wednesday afternoon that he had not issued a customs tariff because of the markets, but he noticed the high returns overnight.

“I was watching the bond market – the bond market is very difficult. But if I looked at it now, it is beautiful. The bond market is now beautiful, but yes I saw last night where people were getting somewhat.”

– With the report of Sawdah Bhaimiya.