Shares after winning, but bond market signals investors are anxious

But the unpredictable behavior of the financial market has feared all week that investors will turn against US assets, while President Trump’s trade war escalated.

The return of the 10-year Ministry of Finance, which underpins the credit and consumer loans and is probably the most important interest rate in the world, rose by around 0.1 percentage points on Friday. The increase to sharp movements during the week, which took the return of the 10-year ministry of finance from less than 4 percent at the end of the last week to around 4.5 percent.

These increases may appear small, but they are major steps on the financial market and cause investors to warn that Mr. Trump’s tariff policy causes serious turbulence. It is also important for consumers. For example, if you have a mortgage or car loan, the interest rate you pay is related to the 10-year return.

Ten -year government bonds are also considered a safe port for investors during the volatility of the stock exchange, but the strong increase in returns this week have made this market unusually dangerous.

The yield return of a bond moves in the opposite direction at its price. Since the yields have risen unexpectedly, investors suddenly drop the value of their stocks around the world that hold trillion dollars of checks.

Rising returns for the 30-year bond were also historical, according to analysts. This bond is seen as a special refuge for pension funds and insurance companies because they have liabilities that extend until the future.

“This is not normal,” wrote Ajay Rajadhyaksha, global chairman of the research at Barclays, in a report on Friday. Mr. Rajadhyaksha reached for an explanation and pointed out speculation from Asian investors who are sold in response to tariffs, as well as the possible handling of highly counted bets on the financial market. “Whatever the reason, at the moment, the bond markets are in difficulties,” he said.

The return of the 30-year government bond rose by 0.44 percentage points this week and acted approximately flat on Friday. The movement signaled a strong shift in demand for the long bond. The Federal Reserve determines some very short -term interest rates, which then move over the financial markets. But the further the Fed’s interest rates are removed, the less influence the central bank has.

“As soon as you come at the long end, you are not really in the picture,” said Matt Eagan, a portfolio manager at Fund Manager Loomis, Sayles & Company. “There are fewer natural buyers in this market. Small changes to supply and demand can lead to big swings.”

As a rule, the market for almost 30 trillion dollars is too large to be significantly influenced by shifting the appetite.

A measure of volatility on the financial market has reached its highest level since October 2023.

“A lot was sold that we saw,” said Vishal Khanduja, portfolio manager for the Total Return Bond Fund at Morgan Stanley Investment Management.

Another worrying sign this week was the decline in the US dollar, which fell against a currency basket by 0.9 percent, which represented his big trading partner on Friday. Each currency of the 10 -nations group rose compared to the dollar and further pointed to a deduction of US assets.

A weaker dollar, at the same time as state bonds and stocks that sell, is a rare combination given the role of the dollar as a safe haven of the global financial system.

Despite the monthly slump in the stock market, which approaches a bear market, it was the bond market that “grumbled” looked that Mr. Trump prompted him to pause the worst of his tariffs for most countries on Wednesday.

“The great risk elephant in the room is the financial market,” said Eagan.

The Federal Reserve officials have recognized the recent gyrations, but did not seem to be too alarmed. Susan Collins, President of the Boston Fed, said The markets continued to work well. Overall, there was no “liquidity concerns”, she said, although she was added that the central bank was “absolutely prepared” if necessary.

For investors, the moves repeated the wild price fluctuations in the pandemic sale in March 2020 and previously a seizure of volatility in September 2019. These events frightened investors and arranged for quick intervention by the Federal Reserve to stabilize the market.

This time the Fed is in a more difficult position. The central bank guarantees the inflation effects of tariffs, which holds the interest rates high. But it would be better supporting for the financial markets and the economic growth of interest rates, which has previously resisted the central bank.

On Friday, a widespread measure of consumer mood has been at the lowest level for about three years. The expectations where inflation will increase in 12 months and underlines the challenge of the Fed.

In the meantime, the chaotic implementation of this week and then a partial postponement in global tariffs, followed by an escalating trade war between the USA and China, has not sure that global investors are relating to the financial market or even the US dollar as a safety source and stability.

Foreign investors are among the largest owners in the US government’s debt. Japan is the largest based on official data and has the US financial debt worth more than 1 trillion US dollar worth more than 1 trillion US dollar. The next largest in China, which holds 760 billion US dollars in government bonds and has been reducing more than a quarter trillion dollars since 2021.

“Wake Up People,” wrote Andrew Brenner, an experienced bond dealer and head of international fixed income at National Alliance Securities, in a short e -mail. “This is foreign money that releases the financial market due to collective bargaining policy.”

Some analysts and investors fear that a faster sales pace by foreign investors could drive the US state bond return and the US interest rates even higher.

“The selection of fights with large trading partners who also finance their debts will be particularly risky with a broad fiscal deficit and without credible plan to contain them,” said Eagan.

Also benefit alternatives around the world. Germany recently announced plans to invest in its military, which is financed by new debts. The country’s bond market is viewed as a Benchmark Europe and is often compared to the financial market.

When the concerns regarding the tariffs last week the spread or difference between the return of 10-year-old German bases and 10-year government bonds were shrunk when investors visited the US port.

That quickly happened.