Weekly Economic Commentary | May 2, 2025
Trade tensions are adding to volatility in bond markets.
By Vaibhav Tandon
My father always reminds me that there’s no such thing as a free lunch in life. We must now apply that lesson to investments and question whether anything is truly risk-free.
For decades, U.S. Treasuries have been universally regarded as a benchmark and a safe haven asset during periods of turmoil. But of late, U.S government bonds are being traded as a more risky asset. Instead of taking refuge in Treasuries amid equity market volatility, investors have been looking elsewhere. Within days of the U.S. tariff announcement on April 2, the dollar’s value and bond prices tumbled, pushing the yield on the 10-year Treasury up by 50 basis points.
Inflation risks and the uncertainty over the impact of trade policy on the U.S. economy have prompted investors…
