Traders work on the New York Stock Exchange (NYSE) in the New York City Financial District on March 4, 2025.
Timothy A. Clary | AFP | Pictures of getty
The sale of April for financial markets has been wider and more volatile than typical, causing concern that the aggressive and constant trade policy of Washington, DC could do long -term damage to the financial position of the United States.
It S&P 500 It has now dropped 5.4% since the announcement of President Donald Donald Trump, with everyday movements, with uncomfortable comparisons with infamous financial periods such as in 2008 and 1987. The fall of the last seven negotiation days comes after the values market had already had a rocky start of 2025, and other large classes of American assets have also begun to slide, including the dollar and the dollar, including the dollar and the dollar Treasury.
« The Great Route this year, since the Presidency of Trump, of all that has happened, is that there is a rotation outside the United States and, obviously, it is vicious now: the yields of the good ones remain high and the dollar falls, it becomes the story. But this exodus began long before the day of freedom.Squawk box« »
The largest stock market swings are their account, but Wall Street professionals are becoming more and more concerned about the movements of the currency and good markets. Tresuryys and the dollar often benefit from security for security environments, a function of the United States historical financial force.
But on Friday, the fall in the prices of the bonds pushed the point of reference Treasury Treasury Performance Briefly above 4.5%, up to 3.99% only one week before. In the meantime, the American dollars index reached its lowest level in three years. The Greenback has seen particularly sharp falls against safe safety coins such as the Japanese yen and the Swiss franc, as well as the euro.
« The market again advises the structural attraction of the dollar as a world reserve currency and is undergoing a rapid discolination process.It is nowhere not to be more clear than the continuous and combined collapse in the Bond Market and the good Americans as it ends this week, » said the Deutsche Bank’s strategy, George Savelos, in a note to customers on Friday.
The dollar reached its lowest level from 2022 on Friday, according to a popular measure.
Once for trust?
To some extent, some of the fast movements of financial markets can be mechanical, feeding on each other. For example, the decreases of actions and North -Americans can put a downward pressure on the dollar only so that foreign investors now have less need for the green.
But the size and extent of the movements suggests that you can change something deeper and that there are investors who are now actively moving away from the United States
« Normally, when you see that the big rate increases, I would have expected the dollar to increase. The fact that the dollar goes down at the same time, I think it brings a certain more credibility to the story of Investors’ preferences change« The President of the Fed of Minneapolis, NEEL KASHKARI, said on Friday »Squawk box« »
The same thought process could be at stake in the good market, as foreign governments and other institutions are entitled U.S. treasures. Gennadiy Goldberg, head of the United States Rate Strategy at TD Securities, told CNBC that he has not seen direct evidence that foreign investors are sending treasure, but fear alone is enough to move the market.
« The markets are very based on trust. Even the perception that foreign investors try to move away from the treasure markets can trigger a significant panic, » said Goldberg.
Economic impacts
These movements are not only an abstraction of financial markets, they can have a real economic impact. One of the issues is that companies with a major foreign sales business could see their products trapped in the fire of the world commercial dispute. An anti-American feeling could also become a problem if the stop continues.
« Many of our big companies that have large brands abroad are being discriminated against (against) … We have a big image problem right now, » said Blackrock’s general director Larry Fink « Squawk on the street« »
Treasure performance also excites the prospects for expenditure on the United States government and, by extension of economic growth. Higher returns means that the United States government has more interest in any debt that occurs or problems for new expenses, aggravating concerns about federal deficit.
« The constant state level of sustainable tax deficits in the United States is being reduced. This reduces the flexibility of the North –
In inflation there is the possibility of another flame. Although recent readings have been relatively fantastic, they do not reflect the April tariff ads. The last university of Michigan Consumer Survey showed that the north -Americans are worried about a spike in inflation tied to the rates.
Inflation is not only worrying on its own but also limits the options for the Federal reservationwhich will resist reducing interest rates when consumer prices increase.
« This is what comes next and this is an inflation caused by rates. And this has changed the dynamics in the Bond Market, » Jim Bianco, President of Bianco Research, said on Friday, « » « Moving of money« » And all this talks about the leverage and the bank sale and whether the Chinese sell or not and all the other things, this is only a accelerating in the biggest movement here. «
– CNBC Michael Bloom contributed to reporting.
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