Behind the Money Lessons from the recent US Treasuries sell-off
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Apr 23, 2025 Kate Duguid, the U.S. markets editor at the Financial Times, dives into the recent turbulence in the U.S. Treasuries market. She examines the surprising sell-off triggered by political turmoil, particularly tariff announcements. Duguid highlights the market's structural flaws and the unusual behavior of key players like hedge funds and foreign investors. With scrutiny on hedge fund regulations increasing, she discusses the potential for future chaos amid governmental changes and why understanding these dynamics is crucial for investors.
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US Treasury Market Overview
- The US Treasury market is the largest and most liquid bond market globally. It is generally seen as a stable, less volatile asset class.
Drivers of Treasury Market Growth
- The Treasury market growth is driven by tax cuts, COVID spending, and rising interest rates. Higher government borrowing increases risk and complexity in the market.
Treasuries Lose Safe Haven Status
- US Treasuries are traditionally safe havens bought during crises. The recent events reversed this trend, causing alarm across other markets due to Treasury instability.