Part 4/11:
Perhaps more alarming is the recent weakness in U.S. Treasury bond demand. A key auction for government debt saw bids fall short, forcing yields to rise above 5%, the highest since 2020. The auction's poor performance reflects a broader investor concern over the country’s mounting debt, now surpassing $29 trillion.
Investor sentiment has been shaken by a confluence of factors — geopolitical conflicts, fiscal uncertainty, and internal political discord. The 10-year Treasury yield's climb signifies a loss of confidence in the U.S. debt market. Unlike the stability investors have historically associated with U.S. bonds, recent patterns suggest the market is behaving more like emerging economies, where bond demand is often volatile and yields are higher.