There isn’t a practical alternative to US Treasuries

MY BLOOMBERG News colleagues have written that the mayhem spawned by the Trump tariffs has planted the seeds for plausible alternatives to US Treasuries as a global haven. While they make many salient points, the reality is that there is no viable option for the vast majority of investors.

Treasuries are the bulwark of the world’s financial system for a reason, and the current ructions mostly reflect a well-functioning machine clearing out a well-documented excess of leverage. The greenback has held up fairly steadily, amid strong demand for US dollars in funding markets; central banks aren’t reporting any issues with access to the currency.

There’s still a market price for securities with, so far, no need for central bank intervention. The moment bears little resemblance to the March 2020 Treasury bond rout at the outset of the Covid-19 pandemic, though there has indeed been a similar dash to cash as longer-dated US Treasuries were no longer seen as risk-free assets.