As the world retreats from US Treasuries, will the sell-off deepen?

With new data suggesting a global retreat from US Treasuries in March – the first full month of the Iran" class="entity-link entity-event" data-entity-id="38678" data-entity-type="event">US-Israel war on Iran – market worries are on the rise over whether the sell-off could deepen, as interest rate decisions under new Federal Reserve chair Kevin Warsh, US debt sustainability and prolonged Middle East tensions raise investor concerns.Analysts are currently weighing mounting inflation pressures – which have driven Treasury yields sharply and placed the 30-year yield at its highest level since 2007 – against the US dollar and the Treasury market’s unmatched liquidity, as well as the lack of obvious alternative destinations for global capital flows.Official data showed total foreign holdings of US Treasuries fell to US$9.35 trillion in March, down from US$9.49 trillion a month earlier. Seven of the top 10 foreign holders of US Treasuries, including Japan, China, Belgium, Canada and France, trimmed their exposure to US government debt that month.