Jumpy bond markets make it clear: Trump risks driving US into debt crisis | Heather Stewart

AI desk brief

US bond-market stress is intensifying as the Treasury moves to cap long-end yields, with 30-year Treasury yields back to levels last seen before the 2008 crisis and Washington openly signaling concern about a sell-off. The piece argues that the combination of higher inflation risk, heavy AI-related debt issuance, and fears over US creditworthiness is pushing investors to question the “safe haven” status of Treasuries and, by extension, the dollar.

Treasury secretary Scott Bessent has reportedly doubled the pace of buybacks in the longest-dated bonds and earlier moved to reassure Japan it could use the IMF Repo Facility without selling Treasuries, both interpreted as efforts to prevent foreign official holders from dumping dollar assets. JP Morgan estimates hyperscaler AI debt issuance at $219bn so far this year, adding another supply overhang to an already fragile duration market.

For precious metals, the near-term readthrough is constructive: higher fiscal risk, sticky inflation fears, and pressure on US real rates are all broadly supportive for gold as a monetary hedge. Key catalysts remain any further Treasury intervention, the trajectory of 30-year yields, and whether oil/geopolitical shocks keep inflation expectations elevated; a sustained loss of confidence in Treasuries would likely reinforce bids for bullion.