Is the American Treasury no longer safe for investment?

International News: While on the one hand, the rapid-decay of the stock market is drawing the attention of the people, on the other hand another major crisis is deepening-in the American government bond market. Usually, when there is a call for economic crisis, investors invest money in American Treasury Bonds as a safe option. But this time the picture looks vomiting. Investors are now keeping distance from these bonds and selling them in large quantities.

Treasury yield increased, loans will be expensive

Bonds' selling has increased their yield (interest rate). This will directly affect the pockets of the common people because it will make home loan, auto loan and other borrowings expensive. Companies can also either increase the prices of their products or cut employees due to this rising cost.

Question on America's 'safe haven' image

Experts say that now big investors are not considering America as safe as before. George Sipoloni, fund manager of Pen Mutual Asset Management, says, "There is a fear that America may now lose its traditional 'safe haven' identity." If the world's largest bond market is unstable, it will also affect the global financial system.

Political uncertainty and global signs

Trump's tariff policy and uncertainty of American politics are also bringing a rift in this confidence. At the same time, according to some reports, China is also pulling hands with American bonds, causing the situation to become more complicated. The 'Basis trade' strategy used by hedge funds is also no longer able to stand, due to which selling bonds in the cash crisis is becoming compulsion.

What next?

According to experts, if the American Treasury is no longer reliable for investment, then the question arises that where does the investors go again? Is there any other option that is equally safe and liquid? "If the treasury is not safe, we have no other option," says Brian Rehling of Wales Fargo. This time the situation is different from the recession of 2009. Then the investment rates in bonds were reduced and consumers were relieved. But this time the selling of bonds itself is pushing the market towards uncertainty.