U.S. Treasury Yields Surge Above 4.3% Amid Global Risk-Off Move, Japan Triggers Selloff

U.S. Treasury yields spiked above 4.3% on January 21, 2026, breaking a six-week trading range as global bond markets sold off, undermining their traditional safe-haven status amid rising inflation and geopolitical concerns. The 10-year Treasury yield, a benchmark for consumer and corporate borrowing costs, breached the previous 4.1%–4.2% range. The move followed a sharp rise in Japanese government bond yields after Prime Minister Kishida announced an early election on February 8, sparking fears of increased fiscal spending. Rising U.S.-EU trade tensions and speculation over Trump’s bid to acquire Greenland weakened the dollar and pressured yields higher. Morgan Stanley Investment Management’s Jim Caron said the selloff is tied to Japan, tariffs, and inflation, noting there is “no safe haven” as both bonds and stocks face pressure. Foreign investors have not yet materially dumped Treasuries, but gold rallied to record highs as a hedge. BMO’s Ian Lyngen sees this as a gradual bearish shift, not a full retreat from U.S. assets. Meanwhile, the Supreme Court heard arguments on whether Trump can remove Fed Governor Lisa Cook, with justices expressing skepticism. A ruling against presidential authority would maintain current monetary policy stability.