Will a Bond Market Crash Exacerbate the Stock Market Crash?

Posted April 8, 2025

Before the markets opened on Monday, a new Macro Watch video warned that fears of a major Dollar Devaluation could provoke a flight out of Dollar-denominated assets that destroys tens of trillions of dollars of Wealth over the coming weeks unless President Trump abandons his plan to reorder the global economic system.  (Macro Watch subscribers can log in and watchthat video now: Dollar Devaluation Fears To Drive Stock Market Crash.)

Stocks had begun crashing at the end of last week.  This video emphasized that government bonds may be the next asset class to be sold off.

Then, the bond market reacted.

The 10-year Treasury yield surged 20 basis points during the day—a sharp and sudden move that may mark the beginning of a dangerous shift in investor behavior.

As panic over a possible Dollar devaluation spreads, holders of U.S. government bonds—especially foreign investors—may begin dumping their portfolios to avoid devastating losses.

Until now, falling stock prices had driven investors into government bonds as a perceived safe haven. But what happens if that safety evaporates?

Could a bond market crash now intensify the stock market crash already underway?

I fear that:

• The stage is being set for a Run On The Dollar,

• A selloff of US Government Bonds could drive interest rates sharply higher,

• And rising bond yields might accelerate the destruction of wealth already underway in stocks and other risk assets.

This could become a vicious cycle—with the bond and stock markets collapsing together.

Now more than ever, it’s essential to stay ahead of events as they unfold.

If you have not yet subscribed to Macro Watch, now is the time.

By subscribing to Macro Watch, you’ll gain the insight needed to interpret these fast-moving developments and make the best possible decisions—by yourself, for yourself—to protect your wealth.

The risks are growing. Don’t wait for the markets to confirm what you could already understand.

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