Wall Street is grappling with another turbulent week, as deepening concerns about the U.S. national deficit shake investor confidence in the country’s economic future and global position.
A wave of selling in U.S. government bonds is underway, a move traders are calling the “Sell America” strategy.
The U.S. government is being forced to offer higher returns to attract buyers in the global debt market. On Wednesday, a $20 billion Treasury bond auction drew weak interest, pushing the yield — or interest rate — slightly higher than projected.
Markets responded nervously. Yields on 30-year Treasuries soared past 5% this week, a rare and troubling jump in the cost of U.S. long-term borrowing. Rising bond yields ripple through the economy, increasing rates for mortgages, loans, and other credit products. These bonds, once seen as a bedrock of global finance and stability, are now facing skepticism from investors about America’s fiscal health and credibility.
Adding to market unease, the European Central Bank issued a warning this week that President Trump’s broad tariff policies are threatening global financial stability. “Rapid and repeated shifts in tariff rules, along with major geopolitical changes, could deliver serious economic and financial consequences,” the ECB stated Wednesday.
This caution followed a decision by Moody’s to downgrade U.S. creditworthiness, highlighting the ballooning national deficit, which is nearing $2 trillion. The agency also implicitly criticized President Trump’s latest budget plan and its tax reductions, warning that extending such cuts will limit future government revenue and deepen the deficit.
“We don’t see substantial, long-term cuts to mandatory spending or deficits coming from current budget proposals,” Moody’s wrote.
Together, the credit downgrade, fiscal policy, and uncertainty tied to U.S. trade strategy are shaking how investors — along with businesses and households — view America’s place in the world economy. The “Sell America” sentiment signals what strategist Winnie Cisar of CreditSights calls a “fundamental shift in the story of U.S. economic dominance.”
She notes that many now feel “the U.S. might be a riskier place to park capital than it was just half a year ago.
