A fire has broken out in the U.S.! A large amount of U.S. Treasury bonds are being dumped, with a major seller anonymously mass-selling U.S. Treasuries, and the selling volume could be the largest in three years. Trump's trade war has caused serious trouble! Recently, after Trump stated a 90-day suspension of tariffs on other countries and set the tariff rate at 10%, market confidence in the United States has somewhat recovered. However, just a day later, Trump warned that if an agreement is not reached, high "reciprocal tariffs" will be restored, causing another round of declines and sell-offs in the U.S. stock and bond markets.
The market's concern over Trump's tariff policies has made investor sentiment very unstable. Some overseas investors may reduce their holdings of U.S. Treasuries due to concerns about the disruption of global supply chains and the depreciation of the dollar. In the first week of April, the average daily trading volume of U.S. Treasuries surged by 62% compared to last month. Japanese funds and domestic U.S. insurance funds have joined the行列 of those selling U.S. Treasuries. As for Trump's policies, former U.S. Treasury Secretary Yellen expressed strong dissatisfaction, criticizing that this is the most severe economic self-destruction she has seen in her lifetime. American citizens will have to pay an extra $4,000 due to Trump's tariffs.
With the sale of U.S. Treasuries, the current fiscal pressure on the United States has sharply increased. Because there are $6.5 trillion worth of Treasuries maturing in June alone. Facing the upcoming maturity of U.S. Treasuries, the United States has only two options: one, hope that holders of U.S. Treasuries roll over their investments instead of redeeming them; two, continue issuing new debt to replace old debt. But the problem is that due to the trade war, various countries, including domestic U.S. investors, are bearish on the U.S. It goes without saying that persuading all parties to buy U.S. Treasuries will be a problem that the U.S. must face. If there is a default on U.S. Treasuries, it will undoubtedly severely damage the credibility of the United States, potentially triggering panic selling and a financial crisis.
Clearly, the tariff war is becoming increasingly unsustainable for the U.S. Looking back now, it’s no wonder that Trump repeatedly mentioned waiting for China's call, because Trump may have realized that if he continues to hold out, getting stuck in a tariff deadlock with China, the first to collapse would likely be the U.S. Undoubtedly, U.S. Treasury bonds are becoming a very棘手 issue for the U.S. Many experts believe that the main purpose of the U.S. launching the trade war was to address the U.S. Treasury bond issue, as one of the conditions for tax cuts proposed by the U.S. is for countries to directly donate money to the U.S. Treasury. The trade war has triggered a U.S. Treasury bond crisis, and we will see how long the U.S. can hold out.
Original article: https://www.toutiao.com/article/1829083091685449/
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