Why “Sell America” ​​trends on Wall Street

Wall Street has another volatile week because the impending national deficit worsens the prospects of investors about the United States and its reputation of the world.

Investors sell bonds from the US government as part of a “sell America” ​​called trade.

The United States government had to pay more loans on global debt markets. On Wednesday, the finance department found that the demand for an auction for bonds worth 20 billion US dollar existed and finally paid a slightly higher interest rate (or return) than expected.

This frightened markets. The income for 30-year-old US state bonds has over 5% increased-a unusual and worrying price this week, which the US government pays for its long-term debts. An increase in bond yields is particularly harmful to the economy, since it increases interest rates for many things that pay consumers, e.g. B. on mortgages and other loans.

These bonds are also the undermine of the global financial system and are usually considered safe and stable investments. But now investors question the economic supremacy of the country and its creditworthiness.

This week, the European Central Bank warned that President Trump's comprehensive tariffs put the global financial system in danger. “Frequent shifts and reversations in tariff policy as well as significant changes in the geopolitical environment could have significant economic and financial effects,” said the central bank on Wednesday.

This warning came just a few days after Moody downgraded the united States' creditworthiness, citing the increasing US deficit, which approaches 2 trillion dollars.

Moody's warning also implicitly criticized the budget law of President Trump and his tax cuts. The extension of these cuts will reduce the ability of the US government to achieve more income and thus deter the current deficit.

“We do not believe that material material reductions in the mandatory expenditure and deficits will result in current fiscal suggestions,” said the rating agency.

The downgrading, budget bill and the continuing economic uncertainty caused by the tariffs of President Trump are all deteriorating how investors and companies and consumers feel for the United States and their role in the global economy.

The trade “Sell America” ​​represents a “whole change in the narrative about us for us economic exception,” says Winnie Cisar, the global director of the strategy at Creditsigts.

She adds that investors are now “a general perception that the United States is perhaps a riskier place to park its money than six months ago”.

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