U.S. tariffs on China now total 145% after latest hike (youtube.com)
Some of the aversion to US bonds isn't just the price or the market, but the volatility. It's supposed to be a safe asset but the other day it moved a historic 60bsp.
There are options. Europe is going to do a new issuance, German Bunds. Japan has raised rates slowly after keeping them low forever.
45bsp swing in 3 days, most since 2022.
US is largest producer and exporter of oil, China is the largest importer.
‘Inflation stag.’
6.7% inflation, highest since 1981 (following 5% year before). Survey, not hard data.
Consumer sentiment surprises to downside (youtube.com)
4 years of inflation, still elevated now. So a tariff that might otherwise make a shortterm elevation in price, might in this inflation environment contribute to systemic inflation where it otherwise (if we were 2% inflation) wouldn't.
Mortgage prices up.
Chinese are big owners of mortgage-backed securities.