Wall street Photo: IC

US Treasury yields have recently surged under the shadow of the so-called "reciprocal tariffs,MK sport" continuing to unsettle markets. An expert warned that the US government's unpredictable tariff measures are eroding global confidence in the dollar and the US government's creditworthiness, raising questions about "safe haven" status of US bonds.

The US stock market has experienced significant volatility, but US bonds have not only failed to serve as a safe haven, but have actually been sold off in a rare development.

The US bond market came into sharp focus on Wednesday as investors sold off their bond holdings, although US Treasury yields moved lower on Thursday, CNBC reported on Thursday.

The recent performance of US Treasury bonds is quite abnormal, Wan Zhe, an economist and professor at Beijing Normal University's Belt and Road School, told the Global Times on Thursday. 

Wan further noted that the tariff policies imposed by the US government have already started to undermine its national credit. "This has not only damaged the dollar's credibility but also indicated that the international financial system or development trend under the framework of US dollar hegemony is gradually disintegrating and becoming ineffective," Wan said. 

Such a view has also been widely reported by many foreign media outlets.

"The sell-off may be signaling a regime shift whereby US Treasuries are no longer the global fixed-income safe haven," said Ben Wiltshire, a rates strategist at Citi, according to a Financial Times report.

"The market has lost faith in US assets," Reuters reported, citing a report from Deutsche Bank analysts earlier on Wednesday.

The surge in US Treasury yields occurred amid a sharp decline in the US stock market.

According to George Pearkes at Bespoke Investment Group, since the US announced new tariffs, demand has slumped so much that, in just two days, yields on 30-year US Treasury bonds rose at the fastest pace recorded during any major stock market downturn since 1982, the Telegraph reported.

Given that the US stock and bond markets have both experienced substantial declines, while the US Dollar Index has continued to weaken, global investors are increasingly shifting their funds away from dollar-denominated assets.

According to Yi Huan, an analyst at Hua Tai Securities, the recent surge in US Treasury yields underscores the likelihood of an accelerated global de-dollarization trend. Yi said that the US "reciprocal tariffs" imposed on April 2, which exceeded expectations, may act as a catalyst for this acceleration.

Meanwhile, analysts noted that this unusual market movement has raised concerns about the traditional safe-haven status of US Treasury bonds.

"The US Treasury markets are experiencing an incredibly aggressive sell-off, adding to the evidence that they're losing their traditional haven status," Henry Allen, a macroeconomic strategist at Deutsche Bank, said in a note, CNBC reported.