Investors have been unloading long-term U.S. Treasury bonds amid growing fears of unchecked federal deficits and persistently high inflation. The trend is creating mounting pressure on lawmakers in Washington, especially as they attempt to pass The Big Beautiful Bill, a massive spending proposal expected to add $2.4 trillion to the national deficit.

According to the Financial Times, the second quarter saw a net outflow of more than $11 billion from long-term Treasuries—meaning more investors sold than bought—highlighting deepening concerns about the government's fiscal trajectory.

Another key factor driving investor anxiety is the potential economic impact of new tariffs on imported goods. If these tariffs begin to significantly push up consumer prices, it’s likely that investors will further offload long-term bonds in anticipation of sustained inflation, as producers pass higher costs on to consumers.

During a U.S. House Financial Services Committee hearing this week, Federal Reserve Chairman Jerome Powell sought to calm nerves, assuring lawmakers that demand for U.S. Treasuries and the dollar remains strong. He cited America’s stable political system and continued leadership in innovation as key reasons global and institutional investors still see the U.S. as a safe financial haven.