With the fastest pace from the culmination of the coronary pandemic, five years ago, investors are leaving the long -term US bonds, as the growing US debt tarnishes the attractiveness of one of the most important markets in the world.

So far, in the second quarter of the year, the net outflows of mutual funds holding long -term US bonds, covering public and corporate debt, have reached $ 11 billion, according to Financial Times calculations based on EPFR data (Emerging Portfolio Fund) and the distribution of assets to global financial institutions.

Indeed, the “exit” of investors in the closure of the quarter is estimated to be the largest that has occurred after the serious turmoil of the early 2020s.

This development marks a significant shift from the average inputs of the previous 12 months of approximately $ 20 billion.

Long -term bonds, which are widely placed by institutional investors, are recorded in a period of increasing concern about America’s fiscal course. The capital flows capture only a small part of the huge US bond market, but they provide an indication of the overall investment climate.

“It is a symptom of a much bigger problem. There is a great deal of concern in both the domestic and the international investment community about possession of the long -term end of the US government debt curve, “notes Bill Campbell of the investment company Doubleline, who focuses on bonds, referring to the flows.

US President Donald Trump’s “big, beautiful” tax bill, which is under consultation with Congress, is estimated to add trillion dollars to US public debt in the next decade, which will be forced by the ministry.

The White House has opposed that duties and acceleration of growth will reduce debt.

At the same time, market participants are preparing for the duties imposed by the Trump government on major US trade partners, which will trigger inflation, one of the largest scourges for bond investors.

The outflows “reflect concerns about the long -term prospects of fiscal sustainability,” said Goldman Sachs’s leader Lutfi Karoui.

“We have an unstable environment, with inflation remaining higher than the target and with a strong state offering to the eye,” adds Robert Tip, head of global bonds to the PGIM asset management company, referring to the Federal Reserve’s target for 2%.

“This causes nervousness about the long -term end of the curve performance, and a more general concern,” he explains.

Bonds longer ripening duration is particularly sensitive to inflation, as the increase in prices erodes the value of fixed income yields over time.

Concerns are also reflected in the ratio/performance of the long -term US debt, which has declined by about 1% in the current quarter, recovering the strong losses after Trump’s announcements by Trump in April, who scared the markets, according to Bloomberg.

On the contrary, the funds continued to enter mutual funds that are sharing US bonds that mature in the near future – with inputs in short -term strategies exceeding $ 39 billion, according to EPFR data. These mutual funds give juicy yields, as the Fed has maintained the short -term interest rates at high levels this year.

Andrei Skima, head of the BlueBay US Fixed Income Department at RBC Global Asset Management, adds that investors may choose to differentiate and internationalize their bonds at this stage, but stresses: “We do not believe that the end of the US government is the end of the US government. Land income portfolios ».

However, he notes that market participants could begin to require “increased returns to invest further out of the curve” in the market for new US government bonds. “Although we do not see an earthquake coming, there may be vibrations,” he explains.