Pressure on Treasuries is a warning for the American economy

United States public bonds, known as Treasuries, worried the financial market after yields on long-term bonds reached their highest levels since 2007, the period leading up to the 2008 global financial crisis.

American government 30-year bonds reached a level of 5.18% per year. For Bernardo Pascowitch, presenter of Resenha do Dinheiro, the rise in yields indicates that investors are demanding higher returns to finance American debt.

"Contrary to what many people believe, these 10, 20 and 30 year bonds determine the cost of credit in the American economy and throughout the world", says Bernardo.

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American government bonds are considered the main reference for global financial security.

Therefore, when interest rates on these bonds rise, the impact tends to spread to other markets, affecting credit, exchange rates and financing costs in different countries.

"The interest rate of around 5% per year for a 30-year American bond is very high by US standards, considered the main reference for risk-free assets in the world. When this rate rises, the movement also ends up being reflected in the interest curves of countries such as Japan, England, Brazil and other European economies", explains Marilia Fontes, founding partner of Nord Investimentos.

For Thiago Godoy, financial educator, the increase in income has worried the market given the direction of the American economy.

"We are talking about structural distrust in a market that is a benchmark for the world. Inflation is not relenting and investors are not satisfied with the current economic policy", says Godoy.

Bernardo notes that long-term bonds tend to reflect deeper risks related to the future of the economy.

"The short-term bond ends up capturing more political disputes and momentary conflicts. The long-term bond is a bigger problem, because 20 or 30 years involve several governments and economic policies", analyzes Pascowitch.

In addition to fiscal concerns, the market is also monitoring the impacts of geopolitical conflicts on American debt and global inflation.

"Bonds are traded daily, so investors need to follow this market to understand how the American risk and the global scenario are. Any increase in spending or instability ends up impacting these assets", says Bernardo.

There is also a behavioral change among investors. Historically, times of crisis increase demand for American bonds, considered a safe haven in situations of instability. This time, part of the market started to seek protection in other assets.

"Instead of migrating to Treasuries, some investors looked for gold and emerging markets. Countries like Japan and China also reduced exposure to American bonds and expanded positions in gold", adds Marilia.

Dinheiro Review
Carried out with the support of B3 and the investment manager BlackRock, the program is presented by Thiago Godoy, the "Financial Daddy", Marilia Fontes, founding partner of Nord Investimentos; Bernardo Pascowitch, founder and CEO of Yubb, proposes a light, direct and uncomplicated approach to topics related to financial education and investments. The attraction addresses the main themes of the economy weekly with the informality of a conversation between friends - without compromising on analysis.

The Money Review airs every Friday, at 7pm, on the CNN Money YouTube channel and on Sundays, at 3pm, on CNN Brasil.

Source: CNN