Overview

• U.S. Treasury yields have spiked significantly, with the 10-year yield rising 59 basis points since Monday, reflecting a sharp market selloff.
• Hedge funds are being forced to unwind leveraged 'basis trades' due to margin calls, exacerbating volatility and liquidity pressures in the bond market.
• Narrowing swap spreads highlight intensified selling, with foreign central banks and other traditional buyers largely absent from the market.
• Analysts warn that the selloff, triggered by U.S. tariffs and inflation fears, echoes the COVID-era 'dash for cash' and exposes systemic fragility.
• The Treasury market's instability raises concerns about broader financial risks, with some forecasting potential Federal Reserve intervention if conditions worsen.