Treasuries join the risk parade

Billed on Wall Street as so rock-solid safe they're risk-free, US Treasury bonds have long served as first port of call for investors during times of panic.

- Bloomberg

They rallied during the global financial crisis, on 9/11 and even when America's own credit rating was cut.

But now, as President Donald Trump unleashes an all-out assault on global trade, their status as the world's safe haven is increasingly coming into question.

Yields, especially on longer-term debt, have surged in recent days while the dollar has plunged. Even more disconcerting is the pattern of the recent market moves. Investors have often dumped 10- and 30-year Treasuries—pushing prices down and yields up—at the very same time they frantically sold stocks, crypto and other risky assets. The inverse is also true, with Treasuries rising in unison with them.

They are trading, in other words, a little like a risky asset themselves. Or, as former Treasury Secretary Lawrence Summers says, like the debt of an emerging-market country.