President Donald Trump addressing the U.S. Department of Justice in Washington, D.C. on March 14, 2025 (Official White House Photo by Joyce N. Boghosian/Flickr)
President Donald Trump’s economic policies have created so much uncertainty abroad, a new report reveals that major companies are divesting themselves of US treasuries.
In response to the war in Iran and persistent inflation, foreign governments have been getting rid of US Treasury bonds in order to stabilize their own currencies, according to a report by Semafor. Of the top 10 foreign holders of US government debt, seven of them reduced their holdings as of March including China, Japan, Saudi Arabia and the United Arab Emirates. Overall the US Treasury yields could fall to the lowest levels seen since 2007, which was before the 2007-2008 subprime mortgage crisis caused the Great Recession.
Before the report specifically indicating that foreign governments are divesting of US Treasuries at a historic rate, Sen. Ruben Gallego (D-Ariz.) drew attention to the fact that for the first time since 2007 the US Treasury hit 5.2 percent. The investor education platform Wiseman Alpha argued on Tuesday that this puts America in the same economically vulnerable position that it was in before the economy crashed nearly two decades ago.
"Same setup we saw in '07, six to nine months before everything cracked. The bond market runs the show now. The Fed just reacts," Wiseman warned.
They added, "Early next year is when the blowup events start happening. A fund or a bank explodes. Dollar spikes hard. Everything pulls back. Gold, Bitcoin, silver, all of it. That's your mega entry. Q2 to Q3 2027. A COVID-xtem dlike moment.”
Gallego framed the issue in the context of Trump’s recent decision to award $1.8 billion to individuals he claimed were targeted by the federal government, including possibly himself.
"We are borrowing money to pay the January 6th slush fund at highest interest rate that this country has seen in quite awhile," Gallego argued.
Multifamily Owner's Blueprint national chair Reid Bennett warned that Americans "may want to sit down" as they contemplate this news.
"It’s about what your property is worth, what your refinance looks like, and whether your business plan still works," Bennett wrote on X. "Debt gets more expensive — agency debt, banks, life companies, [commercial mortgage-backed security] … all price off Treasury benchmarks. That means higher coupons, lower proceeds, and a whole lot of owners writing checks at refinance."
Former Labor Secretary Robert Reich argued earlier this month that he believes the ongoing debt crisis is in large part caused by the wealthy not paying their fair share in taxes.
“America’s wealthy have never been wealthier,” Reich said. “If they paid their fair share of taxes, we wouldn’t have such a huge federal debt. And we wouldn’t be paying them so much interest on that debt.”
He added, “Know what’s happened, and pass it on.”
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