A Tidal Wave of U.S. Treasury Bond Selling Surges, Alarms Ringing on Wall Street

Recently, the financial market has been rocked by turmoil as the U.S. Treasury bond market is undergoing an unprecedented selling frenzy. Alarms are blaring on Wall Street, and a storm that could potentially reshape the global financial landscape is quietly brewing.

From a data perspective, the scale of U.S. Treasury bond selling is truly staggering. In 2024, China reduced its holdings of U.S. Treasury bonds by 57.3billion,whileJapansoldoffamassive55.5 billion, resulting in a combined total of 112.8billioninsalesbythetwocountries.In2025,thistrendhasnotonlyfailedtoslowdownbuthasintensified.Globalmajorcentralbankshavesoldoffover130 billion in U.S. Treasury bonds, with countries like the United Kingdom and France in Europe also joining the ranks of sellers. Such large-scale selling has placed tremendous downward pressure on the U.S. Treasury bond market.

There are complex and profound reasons behind this selling spree. One of the root causes is the ever-increasing debt scale of the U.S. government. As of March 2025, U.S. national debt has surpassed 36.5trillion,exceedingthecountry′sannualGDPby7 trillion. The U.S. government has an annual fiscal revenue of 4.9trillionbutspends6.8 trillion, resulting in a deficit of $1.86 trillion. It can only sustain its operations by borrowing new debt to repay old debt. This "Ponzi scheme"-like debt model has raised serious doubts among investors about the safety of U.S. Treasury bonds.

The soaring interest on U.S. Treasury bonds further exacerbates market concerns. Currently, the interest on U.S. Treasury bonds has skyrocketed to $1.2 trillion, equivalent to nearly a quarter of the government's annual fiscal revenue just for interest payments, not including the ever-increasing debt. Such a heavy interest burden places the U.S. government under immense pressure in debt repayment. Once a default risk arises, it could deal a devastating blow to the global financial market.

The decline in the U.S. dollar's "ability to attract funds" is also a significant driver of the U.S. Treasury bond selling wave. In the past, other countries purchased U.S. Treasury bonds because the U.S. dollar is the global reserve currency with stable safe-haven properties. However, in recent years, the U.S. dollar has been depreciating continuously, and even American tech giants and retail investors are scrambling to buy gold, which fully demonstrates the market's lack of confidence in the dollar. In this situation, investors are selling off U.S. Treasury bonds in search of safer investment channels.

The impact of the U.S. Treasury bond selling wave on Wall Street is gradually becoming apparent. Bank of America has become the "hardest hit" area in this storm. During the pandemic, it used a large portion of the funds flowing in from deposits to purchase U.S. Treasury bonds. As interest rates rose, the value of these bonds plummeted, resulting in a huge loss of approximately $109 billion in book value for the bank. This has not only affected its profitability and ratings but also impacted its position in the capital market and the industry.

Apart from Bank of America, the entire Wall Street is shrouded in the shadow of the U.S. Treasury bond selling wave. Market panic is spreading, and investors' concerns about economic recession and financial market instability are intensifying. The safe-haven function of U.S. Treasury bonds, traditionally considered a safe asset during market turmoil, is being questioned. Investors are turning to other assets, such as traditional safe-haven currencies like the Japanese yen and the Swiss franc. The U.S. dollar index has also been affected, falling nearly 1% during the day.

From a global perspective, the impact of the U.S. Treasury bond selling wave is even more far-reaching. If a panic selling occurs in the U.S. Treasury bond market, trillions of dollars in bonds will need to find buyers, but with no one taking them up, interest rates will skyrocket. The U.S. government will be unable to repay its debts, and the global financial system could collapse. In history, countries like Mexico and Greece have experienced debt defaults, and the consequences have been dire. For China, although it holds $759 billion in U.S. Treasury bonds and has been reducing its holdings, it remains the second-largest holder. If U.S. Treasury bonds collapse, China's holdings could shrink significantly. Even more frightening is that if the U.S. economy encounters problems, the global trade and supply chains will be impacted, and China will not be able to remain unaffected.

The continued development of the U.S. Treasury bond selling wave not only tests the stability of the U.S. financial market but also poses challenges to global economic recovery. In the future, the trend of the U.S. Treasury bond market remains highly uncertain, and investors need to closely monitor changes in relevant factors. Meanwhile, Wall Street will also undergo severe tests in this U.S. Treasury bond storm.