This is starting to look like a confidence problem around U.S. financial assets, not just a fight over Fed rates. Trump is now tying trade policy directly to the Fed, Norway’s $2.3 trillion sovereign fund wants to cut its U.S. Treasury exposure by roughly $80 billion, and the Netherlands just moved 86 tonnes of gold out of North America citing geopolitical unrest.
Trump threatens to stop trading with countries if the Fed does not cut rates
Trump said the U.S. should have the lowest rates in the world and threatened to stop trading with countries with which the U.S. runs deficits. The threat came immediately after August payrolls showed 162,000 jobs added, making a near term rate cut less certain.
Norway’s $2.3 trillion sovereign fund proposes cutting U.S. Treasury holdings
Norway wants to reduce the government bond portion of its benchmark from 70% to 50%. U.S. Treasuries would take the biggest hit, with the fund potentially reducing its roughly $215 billion Treasury position by nearly $80 billion. The proposal would not take effect before mid 2027.
Dutch central bank moves 86 tonnes of gold away from North America
The Dutch central bank relocated about 86 tonnes from New York and Ottawa to London between March and August. DNB said the move was meant to improve crisis preparedness and the ability to trade the gold during emergencies.
U.S. bond market faces another foreign demand problem
China’s Treasury holdings are at an 18 year low, Japan has been selling Treasuries to support the yen, and Norway is now proposing another reduction. Mohamed El Erian warned that weaker foreign demand is becoming an important problem for the Treasury market.
U.S. 10 year yield approaches 4.8% despite Treasury intervention
The 10 year Treasury yield reached around 4.80%, its highest level since early 2025. Reuters points to deficits, persistent inflation and a huge wave of corporate borrowing tied to AI investment as forces keeping pressure on bond markets.