Why the US Treasury bond market is on the brink of total COLLAPSE. pic.twitter.com/WlhPEVaXkf
— Bravos Research (@bravosresearch) May 5, 2025
2/ The US Treasury bond market may be nearing total collapse
This $27 trillion asset is nearly the size of the entire US economy
If this market breaks down, the ripple effects across the economy would be catastrophic pic.twitter.com/if4Ajvyevb
— Bravos Research (@bravosresearch) May 5, 2025
4/ For context, unless you’ve been off the grid, you’ve probably heard the current administration has torn apart key trade partnerships around the world
These same foreign governments also happen to hold a lot of US Treasury debt pic.twitter.com/XgPxQQHJsJ
— Bravos Research (@bravosresearch) May 5, 2025
6/ The Treasury market functions like any other – driven by supply and demand
If trust erodes, demand drops and supply jumps as foreign holders sell
This dynamic could flood the market and hammer prices even lower pic.twitter.com/x3rT9Y0q2u
— Bravos Research (@bravosresearch) May 5, 2025
8/ So far, the latest data from February shows foreign holdings were rising
But that was before April 2nd’s “Liberation Day” when Trump cut major trade ties
April 2025 could go down as a turning point for Treasury demand pic.twitter.com/ECE8Dz1taY
— Bravos Research (@bravosresearch) May 5, 2025
10/ One of those deeper forces is the growing federal deficit
Since 2008, annual deficits have been over $500 billion
Post-COVID, they’ve shot past $1 trillion per year
That’s the gap between what the government spends and what it brings in pic.twitter.com/pcqiaJRmaz
— Bravos Research (@bravosresearch) May 5, 2025
12/ So how does the government cover that gap?
By borrowing
And when it borrows, it issues Treasury bonds
By selling them to private investors, banks, institutions, and foreign governments pic.twitter.com/qniXTEn0xh
— Bravos Research (@bravosresearch) May 5, 2025
14/ But there’s another factor at play that will significantly increase the supply of Treasury bonds
That can be seen on this chart showing how much government debt is maturing each year pic.twitter.com/VlbxoqkgSq
— Bravos Research (@bravosresearch) May 5, 2025
16/ So this year, we’ll see a perfect storm:
A record deficit and a massive maturity wall unleashing a flood of new Treasury supply
This could crush prices
But just how bad could it get? pic.twitter.com/pM7icxTRyn
— Bravos Research (@bravosresearch) May 5, 2025
