U.S. Treasury Secretary Bessent sought to reassure the market, stating that U.S. bonds were merely experiencing "normal deleveraging."

As Trump's reciprocal tariff plan takes effect, the yield on US Treasury bonds continues to soar, replacing the sharp decline in US stocks as the most discussed topic on Wall Street.

On Wednesday Eastern Time, the yield on the 10-year US Treasury bond rose by 17 basis points to 4.43% during the day, and overnight it once touched 4.511%, marking the first time it has surpassed 4.50% since late February.

After the Trump administration unilaterally increased the additional tariffs on Chinese exports to the US from 34% to 84%, the Chinese government quickly took firm countermeasures, also raising the additional tariff rate on all US-origin imported goods from 34% to 84%.

This has further intensified concerns about a global trade war. Typically, stock market sell-offs and heightened fears of an economic recession would lead investors to rush to buy bonds for safety, thereby pushing down US Treasury yields, but this time it did not happen.

Henry Allen, Vice President and Macro Strategist at Deutsche Bank, stated in a report: "Perhaps more concerning is that the US Treasury market is also experiencing an incredible sell-off, further evidence that they are losing their traditional safe-haven status."

Traders are searching for multiple theories to explain this trend, including hedge funds being forced to sell due to margin calls, and more unsettling speculation about foreign investors selling US Treasuries.

In response, US Treasury Secretary Besant made an urgent statement on Wednesday, attempting to downplay concerns about the US Treasury sell-off. He said the current situation is not systemic and expects the bond market to stabilize.

Besant stated in an interview: "The US Treasury market is currently experiencing a deleveraging turmoil." Besant said he has often witnessed this situation during his hedge fund career. "In the fixed-income market, some very large leveraged players are suffering losses and have to deleverage."

He added: "I don't think this is a systemic issue, I think the ongoing deleveraging in the bond market is a disturbing but normal process."

Michael Brown, Senior Research Strategist at Pepperstone, stated in a report: "However, what I am really worried about now is the movement of the entire US Treasury market, with no sign of easing in the selling pressure at the long end of the yield curve."

The US Fed is scheduled to release the minutes of its March meeting on Wednesday, while the US Treasury plans to hold a $39 billion 10-year Treasury auction later that day.

Prior to this, Tuesday's 3-year US Treasury auction saw weak demand. The largest holders of US Treasuries—and potential bidders in these auctions—are countries such as Japan, China, and the UK, but the US is imposing significant additional tariffs on these countries.

David Zervos, Chief Market Strategist at Jefferies, said: "This is a trade war, and if countries can use their accumulated US financial assets... then they may create some problems."

Rising US Treasury yields are troublesome for both the Trump administration and the US Fed. The White House could have been comforted for a while, as the chaotic initial rollout of tariffs lowered yields, but they have since started to rebound sharply.

Ed Yardeni, an analyst at Yardeni Research, pointed out that Trump administration officials have been crediting themselves for the recent decline in bond yields and mortgage rates, but unfortunately, the yield on the 10-year US Treasury is rising.