US Treasury bonds explained: Why Trump tariffs have investors freaking out and scratching their heads

President Trump’s tariff regime has rocked investor confidence in what has long been considered not only a safe bet for investors, but also a bedrock of the American economy: US Treasury bonds.The longstanding perception that Treasurys are a “risk-free” avenue to park money — a perception that has long been crucial for the US government, businesses and consumers alike to keep borrowing costs low — is being eroded as Wall Street struggles to make sense of Trump’s strategy, according to experts.“Put simply, the US long-bond rate — the Treasury — is the most important price in global finance,” David McWilliams, global economist and author of “The History of Money: A Story of Humanity,” told The Post.“It determines how much the US government pays in interest, the size of the US government debt, the price of all American mortgages is determined by it, and the value of every company on Wall Street stems from it.”McWilliams said that when yields on US bonds rise, “everything else goes down.”“If the monetary world had a North Star, the US Treasury rate would be it.”Typically, Treasurys rally during times of equity market stress.This time, however, they’re falling in tandem with stocks.Equity markets have shed a staggering $7.7 trillion in value following Trump’s sweeping tariff announcement on April 2.

Meanwhile, over the past four days, the yield on the 10-year Treasury note has soared from 4.20% to 4.43%, marking its steepest rise since the height of the 2008 financial crisis.Multiple factors are driving the selloff.Globally, bond yields have been rising on inflation fears and political developments such as Germany’s military buildup and uncertainty in France’s elections.“The recent selloff in US Treasuries…underscores significant shifts in the bond market,” Mark White, a wealth advisor and managing partner of Karpf, White & Associates Wealth Management, told The Post.“Rising Treasury yields typically signal invest...