Article originally appeared on www.zerohedge.com.
Submitted by QTR’s Fringe Finance
The recent selloff in U.S. Treasury bonds—once considered the bedrock of global financial stability—could signal something far deeper than just a market correction.
Yields may not be surging not due to growth optimism — or the basis trade imploding — but also because investors are demanding a higher premium to hold debt issued by a country whose fiscal trajectory is spiraling.
And the trade war has added another layer of geopolitical tension that’s pushing both foreign governments and private institutions to reassess their exposure to dollar-denominated assets.
The long-standing assumption that the U.S. dollar is a safe haven is beginning to crack under the weight of ballooning deficits, weaponized finance, and the political brinksmanship that now routinely defines Washington.
This confluence of market and policy risk is accelerating a quiet but critical exodus from U.S. assets, with foreign central banks reducing their Treasury holdings and …
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