WASHINGTON (Reuters) – Former U.S. Treasury Secretary Janet Yellen said on Thursday that the threat of financial instability prompted by falling prices for U.S. Treasury debt in recent days likely influenced President Donald Trump’s decision to reverse course and partially pause his tariff campaign.
Yellen, in her first broadcast interview since leaving office, told CNN International that U.S. Treasury debt yields rose sharply amid the tariff financial turmoil, causing investors to question their safe-haven status. Bond yields move inversely to price.
“It caused highly leveraged hedge funds that hold US Treasuries to begin to sell their holdings, and that’s something that could really begin to trigger financial instability if there is massive sales of US Treasuries,” Yellen said. “So my understanding is that this is something that was an influence on President Trump in getting him to pause the reciprocal tariffs, and it’s certainly something that should be of concern.”
(Reporting by David Lawder; Editing by Chizu Nomiyama)
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