U.S. Treasury Yields Rise as Speculation Surrounds Potential Chinese Sales
14 April 2025 · Uncategorized ·
Source: · https://finance.technews.tw/2025/04/09/us-bond-rates-rise/
Amid escalating trade tensions between the US and China, U.S. government bond yields rose significantly on April 8th. Speculation has emerged that China may be quietly selling off U.S. Treasury securities (USTs) in retaliation for tariffs potentially reaching as high as 104%.
Investing.com reported that Chamath Palihapitiya, a well-known venture capitalist with ties to Trump’s inner circle, stated on X: "I've heard they are dumping US Treasuries in an attempt to shift the narrative and make our upcoming auctions more expensive." He also suggested delaying Treasury sales due to China’s limited ability to continue selling indefinitely.
According to CNBC, by the close of trading on April 8th in New York, yields for U.S. ten-year bonds reached 4.339%, while those for thirty-year bonds climbed to 4.82%. This represents the largest increase since the pandemic over two days and may be attributable to weak demand at a Treasury auction held by the US Department of the Treasury on April 8th; iShares’ ETF tracking long-term U.S. Treasuries (TLT.US) experienced a sharp decline, closing down 1.89% at $88.35.
Zerohedge claims that China has sold approximately $50 billion worth of US bonds, contributing to the rise in Treasury yields back towards levels seen around the time retaliatory tariffs were announced ("Liberation Day"). However, this claim lacks official confirmation.
Data from January 2023 indicates that China holds roughly $761 billion in U.S. Treasuries—second only to Japan (which holds about $1.08 trillion) as a foreign holder of US bonds.
Tensions between the two countries have recently intensified, with Trump announcing on April 8th plans to raise tariffs against China by an additional 54%, bringing the total tariff rate to approximately 104% when combined with previous levies. In response, China has pledged strong countermeasures, and selling off U.S. Treasuries is considered a potential retaliatory measure.
However, financial media Zerohedge contends that rumors of US Treasury sales are unfounded; instead, they propose that large-scale unwinding of "basis trades" by hedge funds may be responsible for the yield increase.
Investing.com reported that Chamath Palihapitiya, a well-known venture capitalist with ties to Trump’s inner circle, stated on X: "I've heard they are dumping US Treasuries in an attempt to shift the narrative and make our upcoming auctions more expensive." He also suggested delaying Treasury sales due to China’s limited ability to continue selling indefinitely.
According to CNBC, by the close of trading on April 8th in New York, yields for U.S. ten-year bonds reached 4.339%, while those for thirty-year bonds climbed to 4.82%. This represents the largest increase since the pandemic over two days and may be attributable to weak demand at a Treasury auction held by the US Department of the Treasury on April 8th; iShares’ ETF tracking long-term U.S. Treasuries (TLT.US) experienced a sharp decline, closing down 1.89% at $88.35.
Zerohedge claims that China has sold approximately $50 billion worth of US bonds, contributing to the rise in Treasury yields back towards levels seen around the time retaliatory tariffs were announced ("Liberation Day"). However, this claim lacks official confirmation.
Data from January 2023 indicates that China holds roughly $761 billion in U.S. Treasuries—second only to Japan (which holds about $1.08 trillion) as a foreign holder of US bonds.
Tensions between the two countries have recently intensified, with Trump announcing on April 8th plans to raise tariffs against China by an additional 54%, bringing the total tariff rate to approximately 104% when combined with previous levies. In response, China has pledged strong countermeasures, and selling off U.S. Treasuries is considered a potential retaliatory measure.
However, financial media Zerohedge contends that rumors of US Treasury sales are unfounded; instead, they propose that large-scale unwinding of "basis trades" by hedge funds may be responsible for the yield increase.