Institutions: In the current situation, the hedging function of US government debt may fail.

Eugene Leow, interest rate strategist at DBS Group, reported that during the US market shutdown, the overnight movement of German government bond yields reflected market expectations that the EU would increase military spending after US President Trump proposed tariffs related to Greenland. He stated that risk aversion pushed short-term yields lower on the yield curve, but long-term yields fell as the market worried about additional spending, causing the yield curve to steepen. He also pointed out that in the current situation, the practice of seeking refuge in government bonds may not be as effective. Financial decoupling is a risk that exacerbates concerns, with US Treasury bonds no longer being seen as safe assets as in the past. Instead, demand for safe-haven assets has shifted to precious metals such as gold and silver.