The bond markets are experiencing turmoil similar to the stock markets. US Treasury yields have surged significantly over the past few days, primarily driven by growing concerns about the global economic repercussions of tariffs. The sudden increase in US bond yields is worrying as bonds are usually considered a secure investment. This surge in yields comes in light of escalating trade tensions instigated by President Donald Trump's decisions worldwide.

The yield on the 10-year US Treasury bond has spiked by approximately 12% since Monday, momentarily exceeding 4.5% early on Wednesday. Similarly, the five-year US Treasury yield has surged by 13% during the same period, reaching 4%. Bonds represent loans that investors make to entities like companies or governments, receiving interest payments periodically and the principal amount at maturity. Typically, bond prices decrease as yields rise during volatile times, indicating higher risk for investors.

US Treasury bonds, renowned for their safety, are witnessing a significant sell-off as worries mount about potential inflation and a looming recession due to Trump's imposed tariffs. The sell-off suggests doubts about the perceived safety of US assets and their reliability during market turbulence. Speculation also suggests that China, holding significant US Treasury assets, might be selling them off as a retaliatory move against the escalated tariffs. The actions surrounding the sell-off raise concerns regarding the safe-haven status of US assets, including Treasurys.

The sharp decline in US Treasury bonds has impacted global bond markets, with UK and Japanese yields also rising since Monday.