04/10/2025

Tariffs Pushed the U.S. Uncomfortably Close to a Financial Crisis

The strong economy was threatened for little reason

President Donald Trump may have brought the world to the brink of a financial crisis before pausing his tariff war on Wednesday, as the $28 trillion market for Treasury bonds displayed unusual strains in the hours before his change of course.

Global investors sold large amounts of Treasury securities as the 12:01 a.m. deadline for imposing the highest U.S. tariffs in decades approached. The selling surge sent the yield on the 10-year Treasury bond, which was below 4 percent on Friday, to 4.5 percent, before it closed a tick lower. In the past three days, the rate on the 30-year Treasury jumped the most since 1982. Higher yields eventually mean higher borrowing costs, for both consumers and the federal government.

The speed of such moves in the normally placid Treasury market raised fears that some investors, perhaps including foreign central banks, were ditching U.S. government bonds amid a gathering panic over the unintended consequences of Trump’s 360-degree assault on global trade. That would mean the end of a century of U.S. financial supremacy and leave markets unsure of the values of stocks, bonds and other assets around the world.

Please select this link to read the complete article from The Washington Post.