Trump tariffs cause the US State debt sale

The US economy confidence when investors dumped public debt amid an increase in concern about the influence of Donald Trump’s tariffs.

US bonds’ interest rate – traditionally considered a “safe refuge” of investments during the crisis – increased dramatically on Wednesday.

Infinting taxes on goods imported in the US from approximately 60 countries came into force at midnight, while the trade war between America and China has raised pace.

After the United States went forward with the 104% tariff on China, Beijing gave up 84% of the American product.

Over the past few days, stock markets have sharply reacted to the fact that Trump has pressed the tariffs.

However, the sale of bonds – which, in fact, are the government issued by the government to raise money from financial markets – creates the main problem for the world’s largest in the world.

Purchase State debt or Treasury is known as a safe investment as the state will pay what it is obliged.

But on Wednesday, the yield – or the interest rate – on US bonds affected the highest level from February by 4.5%, which made America more expensive to borrow money.

Although the rate is the same as a couple of months ago, interest rates for borrowing increased dramatically over the last 48 hours compared to 3.9%.

Some analysts suggested that the US Federal Reserve may be forced to enter into when the turbulence continues, in the course of the Bank of England’s emergency action in 2022 after Liz Rabbit’s mini-budget.

“We do not see any other opportunity for the Fed, but to join emergency US Treasury purchases to stabilize the bond market,” said George Saraveles, head of the FX Research department in Deutsche Bank.

“We enter the unknown territory,” he said, adding that it was “very difficult” to predict how markets will respond in the coming days, as the bond market suggested that investors “lost faith in the US assets”.

Simon Frenchman, Chief Economist Panmure Liber, told the BBC that the Fed could decide to reduce interest rates by seeking to protect US jobs, facilitating businesses to borrow in cash because they face higher tariffs.

He said it was “throwing a coin” over whether the United States would enter the recession.

This is defined as a prolonged and common decrease in economic activity, usually characterized by unemployment jump and income.

JP Morgan, the investment banking giant, increased the likelihood of recession in the US from 40% to 60% and warned that American policy is “deviating”.

The introduction of Trump tariffs levied on goods imported from countries abroad threatens to increase many global supply networks.

US companies that bring foreign goods to the country will pay the government tax.

Firms may choose to pass on to customers some or all the cost of tariffs that can push inflation.

Trump’s plan is aimed at protecting US business from foreign competition as well as enhanced domestic production.

Questions remain over the scale, and what type of investor is being resetting our bonds.

There were assumptions, some foreign countries, such as China, which owned about $ 759 billion in US bonds, can sell them.

Mr. Saravel said: “There is little space for escalation on the trade front.

But he warned: “There can be no winner of such a war. The world economy will be lost.”