The Daily Populous Thursday April 10th, 2025 day edition
Authored by theguardian.com and submitted by johnboy43214321

US government bonds, traditionally seen as one of the world’s safest financial assets, are suffering a dramatic sell-off as Donald Trump’s escalation of his tariff war with China sends panic through all sectors of the financial markets.

The falls suggest that as Trump’s fresh wave of tariffs on dozens of economies came into force, including 104% levies against Chinese goods, investors are beginning to lose confidence in the US as a cornerstone of the global economy.

UK bonds also came under pressure from investors, who sent the cost of financing government borrowing to its highest level since 1998, heaping further pain on Rachel Reeves as the chancellor struggles to prevent her budget plans from being wrecked by a panic on global markets.

The yield – or interest rate – on the benchmark 10-year US Treasury bond rose to 4.516% on Wednesday before slipping back to 4.451%, up 0.14 percentage points on the day. This week it has undergone the three biggest intraday moves since Trump was elected in November. Yields move inversely to prices, so surging yields mean falling prices as demand drops.

The move in the 30-year bond was more dramatic. The yield briefly jumped above 5% to its highest since late 2023 and was last trading at 4.899%, or 0.12 percentage points higher than Tuesday.

Both yields came down from their highest levels, however, after a much-anticipated $39bn (£31bn) US bond auction later in the day met market expectations.

“This is a fire sale of Treasuries,” said Calvin Yeoh, a portfolio manager at the hedge fund Blue Edge Advisors. “I haven’t seen moves or volatility of this size since the chaos of the pandemic in 2020,” he told Bloomberg.

Analysts believe the US Federal Reserve may need to step in. Jim Reid, at Deutsche Bank, said: “Markets are pricing a growing probability of an emergency [interest rate] cut, just as we saw during the Covid turmoil and the height of the GFC [global financial crisis] in 2008.”

UK bonds came under severe pressure after the US moves. The yield on a 30-year UK gilt hit 5.65%, surpassing a previous 27-year high of 5.472% set in January.

Shorter-dated 10-year gilt yields were slightly higher at 4.78%, while two-year yields ticked down to 4%.

Higher yields on gilts – UK government bonds – will make things even more difficult for Downing Street, as it will raise the cost of borrowing to fund investment.

China’s intransigence in the face of escalating US tariffs appeared to indicate that the world’s two largest economies were heading for a showdown, with an outcome that analysts said was difficult to predict.

“When challenged, we will never back down,” said China’s foreign ministry spokesperson, Lin Jian. The commerce ministry said: “China will fight to the end if the US side is bent on going down the wrong path.” Beijing has promised further countermeasures.

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It was not clear whether China, which is one of the world’s largest holders of Treasuries, included among its policy changes the sale of those bonds, accelerating the sell-off and the US administration’s financial pain.

Global stock markets suffered another tumultuous day as the tariffs took effect.

Japan’s Nikkei benchmark index fell almost 4%, while Taiwan’s benchmark stock index was 5.8% lower. Hong Kong’s Hang Seng index recouped some earlier falls to close 0.4% down, and South Korea’s Kospi 200 index dropped by 1.8%.

However, China’s stock markets rose, appearing to weather the storm after government interventions. The SSE composite index in Shanghai ended the day 1.1% higher, while the Shenzhen SE composite rose 2.2%.

In Europe, the major markets also fell back. In London, the FTSE 100 dropped by 3% on Wednesday, immediately undoing the gains on Tuesday. Germany’s Dax index dropped by about 2.3%, leading to a 16% drop since 18 March, while France’s Cac 40 fell by 3.3%. Spain’s Ibex index was down by 2.2%.

peeinian on April 10th, 2025 at 01:04 UTC »

I’ve been thinking about this really old Reddit comment from 10 years ago about what to do if you win the lottery.

https://www.reddit.com/r/AskReddit/s/RshgA8abNn

Particularly these passages:

> Right now, you’ll get around 3.5% on the 10 year U.S. treasury. With $18.2 million (20% of $91.2 mil after your absurdly generous family gift) invested in those you will pull down $638,400 per year. If everything else blows up, you still have that, and you will be in the top 1% of income in the United States. So how about you not fuck with it. Eh? And that’s income that is damn safe. If we get to the point where the United States defaults on those instruments, we are in far worse shape than worrying about money.

> If you are really paranoid, you might consider picking another G7 or otherwise mainstream country other than the U.S. according to where you want to live if the United States dissolves into anarchy or Britney Spears is elected to the United States Senate.

> You have provided for your family beyond your wildest dreams. And you still have $36.4 million in “cash.” You know you will be getting $638,400 per year unless the capital building is burning

pen15_club_admin on April 10th, 2025 at 00:56 UTC »

Didn’t Trump pussy out of his tariffs because of the bond sell off?

4moves on April 10th, 2025 at 00:47 UTC »

imagine starting a tariff war as a bluff and destroying the basis of your economy (for over 100 years) in one go.