Wed, 09 Apr 2025

Wed, 09 Apr 2025 Trump tariffs spark US government debt sell-off

The cost of borrowing for the US government rose as confidence in the economy waned.

*The yield on 10-year government borrowing has risen sharply from 3.9% in recent days, with some analysts predicting this could lead to higher costs for companies and households.
*Bond prices have fallen as demand weakened due to investors offloading them, leading to a decline in the value of US debt.
*Economists are warning that the sell-off of US bonds poses a major problem for the world's biggest economy, with some predicting a recession is becoming more likely.
*The US Federal Reserve may be forced to step in to stabilize the bond market, potentially by buying up US Treasuries at emergency rates.
*Some analysts believe that the Fed will need to cut interest rates to protect US jobs and businesses from the impact of tariffs, which could lead to higher prices for consumers.
*The UK is also expected to feel the effects of the sell-off in US bonds, with rising borrowing costs potentially putting pressure on government finances.
*The Bank of England has warned that US tariffs are contributing to a "material increase in the risk to global growth" and financial stability.
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