The yields of the US Treasury bonds are triggered: what an impact will have on the economy

The 10 -year -old Tremed Treasury bond rate exceeds 4.50% per year. Analysts explain that The bond market “is like a confidence thermometer”and that a price drop suggests its performance but with it the cost of indebtedness.

Analysts warn that in the last hours the US Treasury Bonus at 10 years jumped to 4.48%, the largest weekly increase since 2001 and that the 30 -year bonus reached 4.95%, the largest weekly increase since 1982. These increases could negatively impact actions, mortgages and global economy.

“Bonds should have a good performance at times of turbulence as investors seek security, but Trump’s commercial war is now undermining the US debt market“Laith Khalaf, head of AJ Bell Investment Analysis, told BBC.

In this regard, he explained that when you buy a lot, it is a sign of trust. But, if it is sold, as happened this last week, the price drops, and that is why profitability rises, since both are inverse.

“Yes, suddenly, Trump comes and revolutionizes everything, that you may, for fear, sell the bonus and leave. And, when selling it, what about interest rates? Well, they go up because the price drops. If we all sell and every time less people buy, you have to sell cheaper to buy you“The analyst added.

In recent days, The interest rate or yield of 10 -year American bonds increased drastically, from 3.9% to 4.5%, that is, a rise of 15% in just a few days.

Increases the cost of debt in the United States

Financial Advisor Javier Molina, recalled that The United States “has to renew almost 9 billion debt this year, so Trump wanted the low interest rates to be”. That is, the US Treasury has to pay what it owes to investors, but has to continue spending, so you must take new bonds to the market.

“If you get them a type higher than what you were paying now, you will have done a bad business because you will be paying more, it will cost you more and, therefore, there will be more taxes, because somewhere you will have to get that money,” the analyst expanded.

If the profitability of the bonds triggers, although the Federal Reserve decided not to raise interest rates, Banks could choose to raise the rates of mortgage loans to see that there is a lot of risk in the market. “The increase in uncertainty makes credit more expensive because now you have to include more stressed scenarios in your risk analysis,” experts detail.

Another fears of the US economy is that China decided to sell those bonuses if Trump does not want to reach a Reasa. Therefore the same effect happens, the more bonds sell Beijing, the more the guys would rise.

“For citizens, everything would be more expensive, The State would be financed more expensive, they would have to put more taxes for them to raise and continue spending, and thus“They add.

Trust falls into the dollar

The dollar fell widely on Friday because the continuous concern for the tariffs of the United States undermined confidence in the currency as a safe refugesending it to its lowest level in a decade against the Swiss Franco and a minimum of three years in front of the euro.

“Before it was more as a disappointment of the dollar; this is just a dollar crisis,” said Francesco Pesole, Ing foreign exchange. “We need to get some Trump. The dollar is telling us clearly that the markets are very willing to sell the United States“, said.

He dollar index, which measures the currency compared to six main pairs, it fell to 1.2%, temporarily below the level of 100 for the first time since July 2023. The dollar also lost up to 1.4% against the yen Japanese, up to 142.37, and the last fall was 1.2%.