Treasury market’s ‘new world order’ brings fear of the long bond

Signage is seen at the United States Department of the Treasury headquarters in Washington, D.C., U.S., August 29, 2020. REUTERS/Andrew Kelly/File Photo

THE “Sell America” trade that gripped markets this month has left a potentially lasting dent in investors’ willingness to hold the United States government’s longest-maturity debt, a mainstay of its deficit-financing toolkit.

For bond managers at BlackRock Inc, Brandywine Global Investment Management and Vanguard Group Inc, the problem is that as President Donald Trump approaches his 100th day in office, he has generated a growing list of unknowns, forcing traders to focus on a broad array of issues beyond just the likely path of interest rates.