Investors around the world are once again debating the Sell America strategy after US policy and the Federal Reserve created uncertainty, pushing the 30-year bond yield to its highest level since 2007 while the dollar weakened. Bloomberg reported that economic policy decisions by the Washington government over the past two weeks have led markets to question the direction of the US economy. Fed Chair Kevin Warsh communicated with markets in a limited way, sparking concerns about inflation control. Meanwhile, Treasury Secretary Scott Bessent approved US support for Japan in propping up the yen, marking the first currency intervention cooperation between the two countries in nearly 30 years and adding pressure on the dollar. The yield on the 30-year US Treasury bond rose above 5%, the highest since 2007. The dollar has weakened against almost every major G10 currency over the past month. Rajeev De Mello, Global Macro fund manager at Gama Asset Management, sees this as a Trump Administration Premium, or an added risk premium from Trump administration policies. Steve Brice, Chief Investment Officer at Standard Chartered Wealth Management, expects the dollar could weaken a further 3 to 4% over the next 12 months. The US Treasury raised its borrowing estimate for the current quarter to 739 billion dollars, and the term premium on 30-year government bonds rose to 1.56%, the highest since 2013.
30-year yield rises above 5% on Fed uncertainty and policy concerns, directly raising the yield.
