Bond markets are facing upheaval, just like stock markets. Don Emmert /AFP/GettyImages 2025-04-09T12:40:01Z Save Saved Read in app This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? US Treasury yields have spiked sharply in recent days. Surging US bond yields appear to reflect rising fears about the global economic impact of tariffs. US bonds are traditionally considered one of the safest assets, so falling prices are concerning. US Treasury bond prices have cratered, and yields have spiked sharply in recent days as fears mount about the longer-term impacts of President Donald Trump's escalating trade war around the world.The yield on the 10-year US Treasury bond has risen around 12% since Monday, briefly climbing above 4.5% by early Wednesday morning. The five-year US Treasury yield has risen 13% in the same time, hitting 4%.Bonds are loans that investors make to an entity such as a company or government, usually in exchange for interest payments on a set schedule, with the initial investment returned at maturity as well.Bond yields and prices move inversely, with yields rising and prices falling in times of trouble, reflecting increased risk for investors.US bonds are traditionally considered to be among the safest of safe-haven assets as the likelihood of a failed repayment by the US government is seen as incredibly unlikely. Investors rushing to sell them off is unusual and generally seen as a sign of market distress.Treasurys under pressure US Treasury bonds have sold off sharply in recent days. ANGELA WEISS/AFP via Getty Images Investors selling US bonds come amid worries that President Donald Trump's new tariffs, which came into effect on Wednesday, may lead to rising inflation and increase the chance of a recession.This, in turn, would likely slow or even halt expected interest rate cuts from the Federal Reserve.Analysts at Deutsche Bank said in a note on Tuesday that the heavy sell-off "spoke to broader concerns about the safety of US assets and their capacity to act as a haven in times of market stress."There's also market speculation that some of the sell-off may be down to China getting rid of some of its $761 billion US Treasury holdings. In an executive order on Tuesday, Trump raised tariffs on China to 104%.Lin Jian, Beijing's foreign affairs spokesperson, accused the US of "bullying practices" on Wednesday, soon before China announced retaliatory tariffs of 84% on US goods."A trend which will be watched closely is an apparent loss, whether temporary or otherwise, of US assets' safe-haven status. Treasurys sold off heavily amid some speculation China and other parties are dumping their holdings as a retaliatory tool," said Russ Mould of UK-based investment platform AJ Bell. Fed actionThe sell-off in Treasurys has also influenced global bond markets, with UK and Japanese yields climbing since Monday.George Saravelos, Deutsche Bank's head of FX research, told clients in a note this week that continuing disruption could push the Federal Reserve to buy US bonds to support the market.Should disruption continue, there would be "no other option for the Fed but to step in with emergency purchases of US Treasurys to stabilize the bond market," Saravelos' team wrote."While we suspect the Fed could be successful in stabilizing the market in the short-term, we would argue there is only one thing that can stabilize some of the more medium-term financial market shifts that have been unleashed: a reversal in the policies of the Trump administration itself." Recommended video