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Is It Time to Buy U.S. Treasuries on the Dip?
Trump's 'war' with the Federal Reserve has permanently damaged the credit of U.S. bonds.
Concerns about the independence of the Federal Reserve have led investors to intensify the selling of U.S. Treasuries, questioning the credibility of Treasuries as a safe-haven asset. Analysts point out that if the Federal Reserve shifts to a more lenient stance on inflation as Trump desires, or if Trump prematurely nominates a 'shadow chairman' to intervene in monetary policy, the Treasury market will decline further.
New Federal Reserve News Agency: Trump has made it "harder" for the next Federal Reserve chairman.
The market worries that Trump's public belittling and pressure on Powell will leave an indelible "original sin" for Powell's successor. Regardless of who the next chairman is, the independence of the Federal Reserve will be in question. An independent central bank is often seen as more objective and professional, making its decisions more likely to guide market expectations and stabilize the economy. Since President Clinton's era, most U.S. presidents have adopted a stance of "non-interference" with the Federal Reserve.
The U.S. Treasury's 7-year bond auction was lackluster, with the problem still lying in overseas demand.
The portion of indirect bids representing overseas demand only secured 59.3% of the total allocation, down from March's 61.2%, marking the lowest level since December 2021. This marks the second consecutive auction of the 7-year bond to experience a tail. Analysts say that if foreign demand really collapses, the Federal Reserve will have no choice but to intervene and start monetizing these government bonds.
Treasury Yields, Dollar Fall as Trade Worries Loom -- Market Talk
Goldman Sachs: The risk of a recession in the U.S. is underestimated, focusing on China's Internet, Brokerage, and others.
Goldman Sachs predicts that the Global shipments of Smart Phones will remain flat in 2025 (1.24 billion units).