Global economies are on edge as the trade war continues, and there’s another sign in financial markets that things may be about to get worse.
Demand for bonds worldwide is cooling down quickly as investors appear put off by the outlook for some major governments to be able to maintain their finances, including the United States.
“There’s general unease around the U.S. government’s fiscal policies, this tariff war, there’s a new spending tax bill that people have some serious questions about, and what it’s going to do to long-term government finances,” says financial expert Clay Jarvis at NerdWallet Canada.
“So I think those doubts are what’s really shaking the bond market.”
The U.S. government currently has a debt of just over $32 trillion, and pays a substantial amount of its revenue, mainly from taxes, on interest payments servicing that debt.
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