China starts dumping US Treasuries as trade war keeps escalating

China's Economic Strategy: China has begun selling US Treasuries in response to increased tariffs from the Trump administration, aiming to apply economic pressure on the US while risking destabilization of financial markets and potential backlash against its own economy.

Potential Market Impact: A significant sell-off of US bonds by China could lead to rising borrowing costs for the US, trigger panic in the Treasury market, and prompt the Federal Reserve to intervene with quantitative easing, which may also have negative consequences for inflation and the Fed's balance sheet.