Treasure No More: US Treasury Sell-Off Signals Deep Shift in Global Safe Haven Dynamics

The sell-off in US Treasuries on Wednesday has sent shockwaves through global markets, raising questions over the long-standing status of US government debt as a refuge in times of uncertainty.

This was the stark message from Nigel Green, CEO and Founder of deVere Group, as the bond market convulsed in response to new tariffs announced by US President Donald Trump. The new trade measures, which took effect midweek, came alongside an intense liquidation in Treasuries, shaking investor assumptions about safety and predictability.

Yields on the 10-year Treasury surged to 4.51 percent before easing slightly to 4.42 percent, ending the session 16 basis points higher. The 30-year yield broke through the 5 percent threshold, a level that has served as a psychological red line for many institutional investors. Only days earlier, the 10-year yield was below 3.9 percent.

“The so-called safe haven has been stripped bare”

Nigel Green, CEO of deVere Group, commented, “The so-called safe haven has been stripped bare. US Treasuries are behaving more like a high-risk asset than the traditional ballast investors once relied upon.” He said the ripple effect was spreading globally, as borrowing costs in the UK and Japan also rose. “The turbulence in Treasuries is globalizing fast. Borrowing costs in the UK and Japan also jumped sharply, showing the disruption isn’t confined to American shores. The asset that once served as the anchor for world markets is now sparking instability.”

The implementation of Trump’s tariffs, targeting key US trading partners, has accelerated investor concerns over inflation, disrupted global trade assumptions, and spurred a reallocation away from securities traditionally considered ultra-safe. Hedge funds, heavily exposed to complex Treasury strategies, began reducing risk and unwinding positions. The result has been a self-reinforcing sell-off. Nigel Green added, “Markets are telling us in no uncertain terms that the old playbook no longer works. If your portfolio still assumes Treasuries are the universal fallback in times of trouble, you are already behind the curve.”

Spreads between Treasury yields and interest rate swaps have widened significantly, an indicator of mounting stress within financial market infrastructure. The sell-off, however, has implications far beyond bond pricing or Federal Reserve policy expectations. “This turmoil poses an even bigger threat: it chips away at the dollar’s historic safe-haven status,” Green said. For years, investors moved into the US dollar during market volatility, trusting in the strength of US governance, financial market liquidity, and a historically stable economic policy framework.

“The unshakable dollar is being tested in real time”

As Trump’s trade moves inject greater uncertainty into capital flows and investor expectations, that trust appears to be fraying. Rising yields are driving up borrowing costs throughout the US economy, tightening conditions just as investor sentiment turns cautious. Nigel Green questioned, “If Treasuries are no longer seen as the risk-free asset, the logical next question is: how much longer can the dollar maintain its crown as the ultimate safe haven?”

He warned that political decisions which provide short-term gains could impose lasting damage. “Tariffs may deliver short-term political wins, but they carry long-term strategic costs and threatening the dollar’s privileged status is a risk with enormous consequences.”

According to deVere, this week’s events should not be viewed as a brief market dislocation. Rather, they signal a deeper shift in the investment landscape, one that redefines what constitutes safety in global portfolios. “The myth of the invulnerable US Treasury, and by extension, the unshakable dollar is being tested in real time,” Green said. He concluded, “Those who recognize this shift early will have the opportunity not just to protect capital, but to grow it, in a world where safe havens must now be earned, not assumed. The stars and stripes no longer guarantee shelter.”