Benchmark US 10-year Treasury yields posted their biggest weekly increase in more than two decades on Friday as US President Donald Trump’s erratic approach to tariffs prompted global market dislocations and forced selling.
Hedge funds and other asset managers offloaded bonds this week after getting margin calls and posting sharp losses from market volatility, analysts said.
Leveraged investors in particular have been hurt by market whipsaws after Trump last week announced bigger-than-expected tariffs on trading partners, but then offered a 90-day pause for most countries on Wednesday.
Rumors of selling, or lack of buying, by foreign investors are adding to concerns over the market.
Lawrence Gillum, chief fixed income strategist for LPL Financial, called it a “perfect storm” with concerns about sticky inflation also part of the move.
“When you start to have investors from retail to institutional to sovereign wealth funds potentially selling bonds just because of the elevated volatility, you know it’s one bad story after the other in the fixed income market,” he said.
