U.S. Treasuries have functioned as a safe haven for investors during global turmoil for decades. Here’s Investopedia describes their role in providing financial stability:
“Treasure bills (T-bills) are debt securities that are backed by the full faith and credit of the U.S. government and, hence, are considered safe havens even in tumultuous economic climates. T-bills are also seen as risk-free, as any principal invested is repaid by the government when the bill matures. Investors, therefore, tend to run to these securities during times of perceived economic chaos.”
The perception of U.S. government debt as the world’s premier safe-haven asset is changing. The CEOs of both U.S. and foreign financial institutions warn of the dangers they’ve seen develop in recent years as U.S. Treasuries have become riskier investments.
U.S. Treasuries No Longer Risk-Free
A new paper by Roberto Gomez-Cram, Howard Kung, and…
