Former US Treasury Secretary Janet Yellen on Monday voiced concern that former President Donald Trump’s tariffs and broader policies were undermining allies’ trust in the United States’ economic commitments and rattling investor confidence in US assets.
Speaking during a financial briefing, Yellen said last week’s surge in US Treasury yields — which move inversely to prices — was troubling, particularly given their long-standing status as a global safe-haven asset. She warned that such volatility raised questions about the safety and stability of assets traditionally seen as the foundation of the global financial system.
“I don’t think we’re seeing dysfunction in the sense of liquidity completely drying up in the markets, but a pattern suggestive of a loss of confidence in US economic policy and the safety of bedrock financial assets is really very worrisome,” Yellen remarked.
Yields on US Treasury bonds reportedly eased on Monday after the Trump administration announced a temporary reprieve from its highest China tariffs on products including smartphones, computers, and semiconductors. The benchmark 10-year Treasury yield fell by 8 basis points since Friday to 4.41%, though it remained significantly higher than the 3.99% recorded on April 4.
Yellen said she was encouraged by the positive outcomes from recent 10-year and 30-year bond auctions but advised against reacting to higher long-term Treasury yields by shifting issuance toward short-term bills. She emphasized the importance of maintaining regular, predictable debt issuance that meets market demand.
“So I don’t think that moving to bill issuance because you’re disturbed that long rates have gone up would be a sensible financing strategy,” she noted.
Reiterating her longstanding criticism of Trump’s economic approach, Yellen accused the former president’s tariffs and policy decisions of taking a “sledgehammer” to the US economy and damaging key international alliances. Yellen pointed to growing uncertainties around America’s commitments to NATO, support for Ukraine, and the US- Mexico- Canada trade agreement as evidence of eroding trust on the global stage.
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cc: Daily Post Ng
