Donald Trump’s tariffs have triggered a “fire sale” in bond markets in one of the clearest signs yet that US assets are losing their status as a safe haven for investors.

US government bonds, which are traditionally considered a place for investors to put their money in times of turmoil, faced a sell-off on Wednesday despite the deepening losses on global stock markets .

The move will pile pressure on President Trump, who has made it one of his key priorities to lower yields on bond markets – a benchmark for government borrowing costs.

Scott Bessent, the US treasury secretary, said in February that the president “wants lower rates”, adding “he and I are focused on the 10-year Treasury and what is the yield of that”.

Calvin Yeoh, a portfolio manager at hedge fund Blue Edge Advisors, said: “This is a fire sale of Treasuries.

“I haven’t seen moves or volatility of this size since the chaos of the pandemic in 2020.”

The yield on 30-year Treasuries surged as much as 0.25 percentage points overnight to a level last seen in November 2023.

It took the three-day rise in yields to the largest since pandemic in 2020, according to data compiled by Bloomberg.

Bond yields tend to fall when investors race to buy up the assets, which pushes up their price.

Investors usually expect to see bond yields fall during downturns in stock markets as money is moved out of riskier company shares and into the safety of government debt.

But that is not what has happened in recent days, with the rise in yields coming at the same time as the drop in stocks – indicating a loss of confidence in the market.

“Perhaps even more alarmingly, US Treasury markets are also experiencing an incredibly aggressive sell-off,” said Deutsche Bank analyst Jim Reid.

He said the move was “adding to the evidence that they’re losing their traditional haven status”.

Mr Reid added: “There’s no sign yet that the market is managing to successfully find a bottom, and it feels like no asset class has been spared as investors continue to price in a growing probability of a US recession.”

The 10-year US bond yield – a benchmark for federal government borrowing costs – has surged 41 basis points this week, with the rises impacting the cost of servicing national debt around the world.

The cost of long-term UK government borrowing hit its highest level since 1998 as Mr Trump’s tariffs threatened to destabilise Britain’s public finances.

The 30-year UK gilt yield rose as much as 16 basis points in London to 5.51pc, exceeding highs hit in January when there were concerns that Rachel Reeves would not be able to meet her self-imposed fiscal rules .

The Chancellor said on Tuesday that her promise to get borrowing falling as a percentage of GDP within five years was “non-negotiable”.

Jack Chambers, a strategist at ANZ, said the bond market sell off had gone “beyond fundamentals”.

“This is about liquidity,” he said.

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