Last Thursday and Friday, US dollar (USD) has depreciated against major currencies such as Euro, Yen. On Friday, USD even depreciated against Sing dollar. Correspondingly, US Treasury bond (or govt bond) yields have been rising.
More infomation can be seen in https://www.youtube.com/watch?v=H3nRgZGBREs
In twitter, most people are asking 'Who is selling the US Treasury bonds?' I think this is the wrong question to ask.
Instead, the simpler question to ask is 'What is it implying?'. If when one's currency is depreciating and one's govt bond yields are rising, it implies that investors are losing confidence in the currency and would demand higher returns (yield) to hold the currency.
Why are investors losing confidence? The most recent example was the Liz Truss moment in 2022, where the new Liz Truss administration announced policies increasing UK government spending and fiscal deficit. This led to investors losing confidence in UK glits, pushing its yields higher and UK pound depreciated against other currencies. The situation stablised only after Liz Truss was pushed out and her policies halted.
So with this example, probably the current USD depreciation and its rising bond yields could be due to investors perceiving higher US fiscal deficit in future. It could be a response to US $5 trillions tax cut plan (see https://www.bbc.com/news/articles/c7vnnv6n29no), which would worsen US fiscal deficit in future.
MSNBC had a recent video on US fiscal deficit: https://www.youtube.com/watch?v=wEj_9tNyvVQ
Also see: https://x.com/HayekAndKeynes/status/1911385708893208948
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