Former Treasury Secretary Henry Paulson is sounding the alarm, stating the U.S. must have a contingency plan for a potential collapse in demand for Treasury securities.
This warning comes as Treasury yields are rising, with demand constrained by inflation and geopolitical tensions. Market indicators currently suggest a 23% probability of a U.S. recession by the end of 2026.
Paulson’s remarks highlight a significant concern that Treasury demand could falter under current economic conditions. Key signals to monitor include Federal Reserve statements, Treasury updates, and evolving geopolitical developments.