BarnBridge narxBOND

Recent developments in the US Treasury market have raised concerns among financial analysts and investors. Jim Bianco, a prominent market analyst, highlighted an exceptionally rapid surge in the 30-year Treasury yield, noting a 56 basis points (bps) increase over three trading days. Anything similar like this hasn’t been seen since January 7, 1982, when yields were 14%. Bianco shared charts illustrating the 3-day change, showing recent volatility dwarfing historical norms. This likely suggests a forced unwind of the “basis trade,“ which is a strategy employed by hedge funds involving the simultaneous purchase of Treasury securities and the sale of corresponding futures contracts to exploit price discrepancies. Such an approach usually relies on substantial leverage and assumes stable market conditions. Bianco argues that this move reflects systemic stress and not human decisions, as it occurred at midnight ET. He notes that such a historic shift points to a forced liquidation, rather than deliberate rate outlook decisions by fund managers. Shortly afterward, Bianco reported the 30-year yield reaching 5%, up 67 basis points since the last 54 hours. He compares this to the 2022 Liz Truss crisis in the UK, where gilt yields surged 130 basis points in five days due to an aggressive fiscal policy. Several elements might be the cause, but it all starts with the introduction of new tariffs by Donald Trump and his administration. They officially take effect today, which has probably heightened inflationary fears and raised concerns about reduced foreign investment in US bonds. In addition, margin calls and increased volatility have compelled hedge funds to liquidate positions hastily, further destabilizing the market. There’s also some speculation about foreign entities, such as China, potentially reducing their US Treasury holdings, which has added to market apprehensions. Whatever the precise trigger, the sharp rise in Treasury yields means falling bond prices. This could lead to increased borrowing costs for the US government, as well as possibly widening the federal deficit. Not to mention that the current market turbulence has drawn parallels to past financial crises, leaving people to wonder if maybe the central bank interventions will take place to stabilize the situation. Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.

Renewed US-China trade tensions under the Trump administration, dubbed by some as “Tariff War 2.0,” coincided with a sharp rise in the benchmark 10-year U.S. Treasury yield this week. The yield climbed to 4.36% , reportedly jumping significantly in just two days to reach its highest level in over a month. The spike suggests increased borrowing costs and growing investor unease regarding inflation and the large supply of government debt hitting the market. The yield surge also marks a shift in investor sentiment after weeks of relative calm in the bond market. Stubborn inflation fueled bets on the Federal Reserve keeping rates higher for longer, contributing to upward pressure on yields. Traders are now reassessing the timeline for potential Fed rate cuts, which had been aggressively priced in just weeks ago. Related: ‘Ignore China At Your Peril’: Ben Zhou Flags Yuan Devaluation’s BTC Impact Adding to the pressure, the U.S. Treasury Department held a $58 billion auction of three-year notes Tuesday – the first major debt issuance since the latest tariff news. While demand appeared reasonably strong, the auction cleared at an elevated yield, suggesting that investors are demanding more compensation to hold U.S. debt in a volatile macro environment. The prospect of higher import costs from the additional tariffs also influenced inflation forecasts. Related: BlackRock CEO Sees Economy Weakening, Warns Trump’s Actions Could Ignite Inflation Concerns are also mounting that key foreign buyers, especially China and Japan, could be reducing their U.S. debt holdings. China reportedly sold $50 billion in U.S. Treasury bonds, an action that can contribute to higher yields by reducing demand. Also, South Korea announced an aid package aimed at buffering shocks from global economic friction. While the White House hasn’t detailed further tariff plans, President Trump previously warned that initial actions might be “just the beginning.“ Such a rapid shift higher in benchmark yields puts downward pressure on riskier assets—including crypto—and generally tightens financial conditions. The 10-year yield influences mortgage rates and corporate borrowing costs, which impacts everything from housing demand to business investments. What does it mean: This isn’t just market noise; it represents the bond market’s forceful repricing of multiple risks—inflation heightened by tariffs, debt supply, and uncertain foreign demand—against earlier, perhaps overly optimistic, expectations for Federal Reserve rate cuts. Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.

*TRUMP: I WAS WATCHING THE BOND MARKET, IT’S NOW BEAUTIFUL😂😂 Truth: Bond market backfire on him😁

1/ Normally: Economic fear = Lower yields When there's: - Recession risk - Trade war - Stock market panic ➡️ Investors rush into Treasuries ➡️ Bond prices go up ➡️ Yields fall That’s the classic “flight to safety” play. But this time? Different.

3/ 🔴 Point #1: Bond Supply Explosion- The U.S. is borrowing massive amounts. 🧾 In just H1 2025, Treasury is issuing $1.6 trillion in new debt. When there’s too much supply in any market… ➡️ Prices drop ➡️ Yields rise Simple demand/supply dynamics.