Global Shift From Dollar Gains Pace as 10-Year Treasury Yield Tops 5%

Overview

• The 10-year U.S. Treasury yield climbed above 5 percent this week, the highest level since 2007, as investors demanded bigger returns on U.S. debt.
• Norway’s sovereign wealth fund said it will trim its Treasury exposure and other official holders are moving reserves into gold and other assets.
• The Netherlands and France have physically repatriated large shares of their gold holdings from U.S. vaults while global official gold reserves surpassed foreign holdings of Treasuries last year.
• The U.S. Treasury quietly bought back $5.2 billion of longer-dated debt this month and Treasury Secretary Scott Bessent publicly defended U.S. financial credibility in congressional testimony and public remarks.
• Countries are building alternatives to dollar settlement through projects such as China’s mBridge and Russia–India digital arrangements, a trend that could weaken U.S. leverage from sanctions and raise long-term U.S. borrowing costs even as private capital continues to rely on U.S. markets.