Bonds are debt securities issued by governments and companies to raise money. Bondholders are effectively providing a loan to the government or company issuing a bond, on which they earn interest, known as the yield.
Typically, US treasuries (US government bonds) have been seen as a safe haven for investors. But the increased volatility of recent weeks – threats of sky-high tariffs on all Chinese goods entering the US and reciprocal similar tariffs on American goods exported to China – have left many uncertain as to what to expect next and in the longer term.
Many investors appear to have voted with their feet and reduced exposure to US dollar assets, treasuries and equities, leading to sharp falls in these markets and the value of the dollar. While equity markets have recovered much of those losses, fears that foreign investors are losing faith in the stability of the US and its economy are casting a shadow over the…
