Long-dated Treasuries fell on Monday as investor attention turned to the US’ ballooning debt after Moody’s Ratings stripped the nation of its last top credit rating.

Moody’s also forecasts US federal debt to rise to around 134% of GDP by 2035, up from 98% in 2023, with the budget deficit expected to increase to nearly 9% of GDP. This deterioration is attributed to rising debt-servicing costs, expanding entitlement programs, and falling tax revenues.

Developments in Trump's global tariff war, which have swung currencies wildly in recent months, have slowed considerably this week, even as the clock ticks down to the end of 90-day tariff respites for U.S. trade partners in the absence of new trade deals.

The dollar slipped again Tuesday, weighed down by the Federal Reserve’s caution over the economy while traders considered news of upcoming U.S.-Japan talks.

Investors faced yet another bumpy start to the trading week with US assets coming under fresh pressure, although it’s mounting concern over American debt rather than tariffs generating the volatility this time.

Gold prices rose on Wednesday to their highest levels in a week as the dollar weakened and investors sought safety amid U.S. fiscal uncertainty, with Congress debating a sweeping tax bill.

Treasury yields fall and the dollar is little changed as Monday's "Sell America" trade recedes a bit. Concerns about the U.S. government debt flared up after the Moody's downgrade and the progress of a tax bill in Congress that looks poised to widen the already worrisome budget hole.

The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, is slipping lower for a second consecutive day on Tuesday as markets continue to digest the recent downgrade of the rating in US debt, which led to a rollercoaster in US bond markets.