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2mo ago

Investors Pivot From U.S. Treasuries as Senate Poised to Pass Trump’s $3.3 Trillion Bill

Investors are shifting into European, Australian and Singapore bonds as surging deficits raise U.S. risk premiums.

The BlackRock logo is pictured outside their headquarters in the Manhattan borough of New York City, New York, U.S., May 25, 2021. REUTERS/Carlo Allegri/File Photo
U.S. Dollar banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
U.S. President Donald Trump gestures after returning early from the G7 Leaders' Summit in Canada, at Joint Base Andrews, Maryland, U.S., June 17, 2025. REUTERS/Kevin Lamarque/File Photo
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Overview

  • The Senate is poised to pass President Trump’s tax and spending measure, which the CBO estimates will boost federal debt by $3.3 trillion.
  • Nonpartisan analysts project the legislation could add up to $5 trillion to U.S. debt over the next decade.
  • Moody’s downgraded the U.S. credit rating in May, citing runaway deficits and mounting government debt.
  • Treasury International Capital data show a net $14.2 billion withdrawal of foreign funds from U.S. debt markets in April.
  • BlackRock and other asset managers recommend diversifying into European, Australian and Singapore sovereign bonds as rising U.S. deficits decouple Treasury yields from Fed policy.