For my generation, 1991 is placed in memory not only as a deep economic crisis, but also as a chapter of deep national insults. This was the year when India, desperate and corner, were forced to kneel – to pledge their gold and open their economy on terms set by the West. Just to secure $ 2.2 billion IMF loans and $ 500 million World Bank package, we had to accept the conditions that felt like a surrender of sovereignty.
I should quickly clarify that it did not hurt those reforms, but the way they were forced to a proud and ancient civilization, at that moment reduced to a supplier. As a matter of fact, it was a long time over -over -over -time to reduce the disintegration of the corrupt license Raj or reducing the irrational tariff obstacles. We were happy to get rid of them. But the person who stunned was designed to do so: not as a partner in progress, but was being punished as a failed pupil. The conditions were harsh, tone kripalu.
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I remember how the West treated, especially the United States, which was self-dominated in its best way in those days. He had an independent world and free market swagger. He demanded the same from us. He saw the world in his image.
Today, it is very bitter to ignore irony. After the self-proclaimed champion of globalization, the same US, now the tariff to make its own is hidden behind the walls. President Donald Trump, angry for all, put a universal 10 percent tariff and is engaged in the same bullying to friends and enemies. Nobody else, it seems, dare to face it.
Treasury Bond ‘Aura disappears
Trump’s uncertain threats, his disregard for international criteria and his open Dadagiri triggered chaos in global markets. American consumer, once preserved by confidence of economic stability, now a sea flounder of uncertainty.
The most important indication of the current upheaval – even American Treasury Bonds – is once seen as the safest investment in the world – start moving. For decades, investors moved to these bonds during crises, believing that they were a safe place to park their money.
But that belief is now disappearing. In the last 10 days, a dramatic sales have been swept away through global markets. Once investors were getting rest in American debt, they are now asking what was unimaginable – is America still anchor of global economy?
This fresh wave of panic was sparked by Trump’s move last week – a new round of sweep tariffs on dozens of countries, including 145% of duty on Chinese imports. The interest rate (or “yield”) on a 10-year-old American bond jumped up to 4.516 percent before falling back-a large and sudden change was not seen as Trump was first selected in 2016. The 30 -year bond also saw a sharp increase, at the rate of about 5%. It is difficult to say whether someone should laugh or cry at Trump’s strategy, because at a time when the US is flexing its protectionist muscle, its holiest financial equipment is losing its shield of invincibility.
Hedge Fund Portfolio Manager, Calvin Yehoh said, “This is the sales of the treasury, which was quoted in the media, their words echoed the fear that it is not a regular improvement, but a structural uncontrolled.” I have not seen this size move or volatility since the anarchy of epidemic in 2020.
Trump had to blink an eye for Bond Market Jitlers, thank you
The bond market cell-off was so nervous that it was disturbing the veins even inside the White House. Trump admitted last Wednesday, “Trump admitted last Wednesday, told reporters that he was looking at the market closely.” Bond market is very difficult, “he said. While the wall street and economists criticized the mercurial president had failed to speak to the merciless president, the bond was sufficient to delay them in the bond market.
Even with Trump’s 90-day break on high tariffs, the financial markets are still very nervous. Last Wednesday, the interest rate on US government loans increased by 5% – a major step that is usually only in a crisis. The last time something happened during the Kovid epidemic in March 2020, when the world was more concerned about finding ventilaters and vaccines than looking at bond markets. Subsequently, it took this emergency action to calm things. This time, Trump’s sudden stagnation on tariffs acted like a quick improvement to prevent nervousness – at least for 90 days, for 90 days.
Traditionally, when the world becomes irritable, for example, during an emerging recession, investors participate in the American treasury, increase prices and carry down the production (interest rate). But not this time. Despite the increasing apprehensions of the US recession, investors are scattered, bond prices are falling and yields are increasing, a symptom of increasing fear about this trade war is increasing. It is a financial counterpart to seek shelter from a storm or heavy rains and leak the roof. Helidity is today’s global order.
Who is to blame for this market? Well, and who but President Trump. His decision to slap 145 percent tariffs on his raised tariffs and Chinese goods has ruled the “SAIL America” story. The media quoted a blunt financial expert saying: “Treasury and American equity are under pressure. It is a toxic combination for dollars.” In short: Markets are not affected.
Now for a little technical turn – but one it is really important. Hedge funds are making large, risky bets, known as “Aadhaar trades”. These bets rely on the small value difference between the American government bonds and the futures tied to them. When the markets are calm, it can work. But when things bounce, like now, those trade can fall rapidly. To make cases worse, brokers are now asking these funds to pay or pay more money, and the easiest thing to sell in a hurry is American government bonds. Yes, very bonds everyone sees as safe and stable. A specialist placed it directly: “US bonds are usually rock-solids, but when large investors need cash quickly, even those are dumped”.
What are government bonds?
The next day I was interacting with a fellow journalist and some random neighbors in London and they think they have very few ideas about the government bonds and how they work. Therefore, before going any further I can explain it and at the same time I can: Government bonds are the equipment they use to borrow money. When a government issues bonds (such as American Treasury Bond, UK Gilts, or Chinese government bonds), it is borrowing money from investors – promises to pay it with interest later. Let’s take America as an example. When America wants to borrow money, it releases treasury bonds. Investors, such as governments, banks, pension funds and even individuals, provide cash to the government. The US government pays the value inscribed on the future date. It also pays regular interest. Therefore, in fact the total bonds of the US government are its total debt.
Why does it matter on a large scale to India
This story is on a large scale for India and Indians. Indian investors, especially for the government, American bonds remain a reliable tool for stability and risk management in an unexpected global economy. India is an important holder of US Treasury Securities, which ranks 14th, with a total investment-government and private-wheel, with $ 225.7 billion (it was $ 247.2 in September 2024). While accurate figures dividing public and private holdings are not publicly available, these investment are mainly inspired by a mixture of portfolio diversification strategies, foreign exchange reserve management and reactions to global and domestic economic conditions.
Another possible twist
Now let me come to another turn in the story. As of January 2025, China held about $ 760.8 billion in American Treasury Securities, making it the second largest foreign holder after Japan. If China suddenly had to sell an important part of its American Treasury Holdings, some things may happen. This may increase US interest rates. A large sale-band market with treasures floods with treasures, reduction in their prices and rising yields, which translates high lending costs for the US government and consumers. Such a Chinese steps can reject global financial markets, increasing volatility and uncertainty. It can also stress American-China relations. This can increase economic tension between the two countries, probably moving the business war forward.
However, this action will also pose a significant risk for China. There are some landscapes here. Financial losses-A rapid sales-off can devalue China’s remaining holdings, which can cause adequate financial losses; Currency Appreciation – Selling American property can strengthen the yuan, making Chinese exports more expensive and less competitive; And finally, it will give rise to global economic instability. As a prominent player in the global economy, market -destroying action can also affect China’s own economic interests negatively.
Therefore, while China has the ability to influence US financial markets through its Treasury Holdings, sudden sales will lead to significant risks for both nations and can lead to comprehensive global economic results.
US government neck neck in debt
By March 2025, the total US federal government’s loan was $ 36.56 trillion; By the end of 2024, China’s debt was around $ 6.7 trillion; The UK loan was $ 2.5 trillion. These bonds are traded – so their prices run up and down depending on demand, interest rates, inflation expectations and global belief. If investors sell bonds, such as they are now with the American Treasury, prices fall and increase the yield (interest rates), which is more expensive than borrowing for the US government and can derail its budget plans.
Anyway, it is not just about market geors or investor nerves. It is about the erosion of faith in very devices, which have long underlined the global economy. The US Treasury bonds, for decades, have been seen as a surely safe shelter to park money when the world feels unstable. But what happens when instability comes out of safe shelter?
Results can be seismic. If confidence in American debt continues, the cost of borrowing will continue to increase. In turn, everything affects everything from mortgage rates to infrastructure financing to social expenses. Already, whispering is increasing loudly on Wall Street that the Federal Reserve may need to take steps with an emergency interest rate cut, which reflects rigorous measurements how severe the situation is becoming.
And yet, the architects of this chaos are defense. President Trump continues tariffs to incite a cure-all threatened business partners and international norms.
In 1991, India was asked to shape or ship. Did this, with courage, flexibility and long -term vision. Today, it is the US which is showing symptoms of delicateness in its basic principles, but in its political leadership and economic direction. The rest of the world is watching and saying that this turmoil will be bad for everyone. But when you are at the top you often stop listening.
(Syed Zubair Ahmed is a London -based senior Indian journalist who has three decades experience with Western media)
Disclaimer: These are the personal opinions of the author