U.S. Treasury bonds took a hit on Wednesday as a global trade war intensified, with the Trump administration’s latest tariffs sparking swift retaliation from China and the European Union.

The 10-year U.S. Treasury bond yield surged to over 4.5% before pulling back, indicating a rapid sell-off among investors. This move is notable, as the 10-year Treasury bond is typically considered a safe-haven asset during market turmoil.

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Key factors contributing to the sell-off were the escalating global trade war, investor sentiment and market volatility.

The Trump administration’s tariffs have triggered a backlash from China and the EU, fueling market uncertainty. The result is that investors are quickly selling their Treasury bonds, driving up yields and pushing prices down. The Federal Reserve’s recent policy meeting and economic projections have also contributed to market turbulence, causing stocks and bonds to slump.

These have fine with far-reaching market Implications for the economy, including higher borrowing costs and decreased consumer spending. As the situation continues to unfold, investors will be closely watching for signs of further escalation or potential resolutions to the trade war.

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