Finance Minister Scott Bessant is determined to ignore the bond market’s hiccups over the past few days as standard practice.
This morning in Davos, Bessant was asked how worried he was about the following views: European investors may start selling off U.S. Treasuries Responding to White House remarks about Greenland. The Treasury Secretary responded: “Denmark’s investment in U.S. Treasuries, like Denmark itself, is irrelevant.”
“That’s less than $100 million. They’ve been selling Treasuries for years and I’m not worried at all,” he added. According to CNBC.
U.S. bond yields have moved steadily higher over the past week. 7 days ago, 10-Year Treasury Bond Yields are at 4.14% and have risen significantly to 4.27% at the time of writing, suggesting buyers are exiting the market, pushing yields higher. A more pronounced increase can be seen at the long end of the curve: 30-year Treasury Bond Interest rates are currently at 4.9% (near the key threshold for a 5% yield), compared with 4.78% just a few days ago.
The shift echoes comments from banks over the past few days, which have warned that foreign investors could use the U.S. debt burden to fight an Oval Office plan to buy Greenland. While the largest buyer of U.S. debt is the U.S. central bank, it also relies on foreign governments and private investors to fund its spending.
This is its “Achilles’ heel” Deutsche Bank’s Jim Reed wrote this week, adding: “While in many ways the United States appears to hold the economic cards, it does not hold all the financial cards in the world, and that world will be severely disrupted by the events of the weekend.”
Carsten Brzeski, global head of macro at ING, and Bert Colijn, chief economist of the Netherlands, echoed the sentiment, stressing that Europe’s holdings of $8 trillion in U.S. debt “illustrate the deep interdependence between the U.S. and Europe, but also show that, at least in theory, Europe also has influence over the U.S.”
That leverage could be used to counter President Trump’s threat that a handful of European countries face higher tariffs if they block the U.S. acquisition of Greenland, a territory that is part of the Kingdom of Denmark.
This theory is not unfounded. On April 2, 2025, President Trump announced the imposition of Liberation Day tariffs on every country in the world, ushering in a rocky period in the bond market, with the 30-year Treasury yield soaring from 4.39% to 4.87% in just a few days.
So a week after his Rose Garden speech, Trump announced a 90-day delay in tariffs: the bond sell-off slowed for 48 hours and then began to decline.
However, UBS’s Paul Donovan noted this morning that the impact of the flight from US assets such as bonds and stocks should not be misunderstood. He pointed out that “selling the US” was not the fundamental problem, explaining: “It is not the sale of the debt stock that creates the fiscal crisis, but the inflow of funds. The Tesla collapse in the UK and the financial crisis in Greece are essentially funding problems. The real risk is a reduction in inflows, not a large-scale sell-off. This distinction is relevant for the US (relying on foreign fund flows).”
“Selling America”
While the concept of “Selling America” was just one part of a broader financing picture, it still drew Bessant’s attention and ire. Over the weekend, George Saravelos, global head of FX research at Deutsche Bank, said: published a note questioning whether Europe They want to “play their part” in light of rising geopolitical tensions.
Bessant claimed that the idea that the Europeans would seek to sell U.S. assets stemmed from this document, and According to Bloombergsaid Deutsche Bank’s CEO called him to say the bank did not support the report.
“We generally do not comment on potential communications between bank and government representatives,” Deutsche Bank said. wealth this morning. “In line with long-standing policy, Deutsche Bank Research operates independently and therefore the views expressed in individual research reports do not necessarily represent the views of the bank’s management.”