Bond sell-off accelerates as Trump ramps up tariff threats

January 20, 2026

TL;DR

U.S. Treasury yields, particularly at the long end of the maturity curve, have significantly increased.
European government bond yields, including German bunds and U.K. gilts, have also risen sharply.
Japan's 40-year government bond yield reached a record high, with shorter maturities also climbing due to concerns over fiscal policy and potential snap elections.
High government deficits and accumulated debt are identified as a fundamental problem in the global bond market.
Geopolitical risks are increasingly influencing bond markets, with expectations of higher defense spending.
Japanese investors, historically large buyers of overseas debt like U.S. Treasurys, may increase domestic investments as their yields rise.
Europe holds a significant amount of U.S. bonds and equities, and renewed trade tensions could complicate global capital flows.
Rising bond yields can impact mortgage rates, investment returns, and personal borrowing costs.

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