President Trump has sent a clear message from the World Economic Forum in Davos: any attempt by European nations to "weaponize" their U.S. asset holdings will face "big retaliation."
This comes as some European pension funds signal a shift away from U.S. Treasuries amid the ongoing "Greenland" trade dispute. While U.S. Treasury Secretary Scott Bessent has downplayed the move, the market is on high alert for a potential "tit-for-tat" escalation.
Key Takeaways:
Retaliation Threat: Trump claims the U.S. holds "all the cards" if a mass sell-off occurs.
Yield Volatility: 10-year Treasury yields have already shown sensitivity to these rumors.
Market Sentiment: Traders are watching for a "TACO" (Trump Always Chickens Out) trade—expecting a dip followed by a diplomatic rebound.
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