U.S. Bond Funds Face Heavy Selling Pressure

(Reuters) – U.S. bond funds experienced significant selling pressure in the week ending April 16, driven by concerns that President Donald Trump’s tariff measures could lead to inflation and a potential recession.

Investors divested from U.S. bond funds for the fifth consecutive week, totaling $10.07 billion in net outflows. In the prior week, net sales were approximately $15.64 billion, according to data from LSEG Lipper.

Key Highlights:

• U.S. short-to-intermediate investment-grade funds saw net disposals of $6.3 billion, following net sales of $6.66 billion the previous week.
• General domestic taxable fixed income funds lost around $2.22 billion, while short-to-intermediate government and treasury funds gained net inflows of $6.82 billion.

Equity Funds and Sectors Impacted

U.S. investors also sold off equity funds worth $10.62 billion, a stark contrast to the $6.5 billion in net purchases made the week before.

The sectors most affected included:
– Tech: $819 million in sales
– Healthcare: $514 million in sales
– Consumer Staples: $348 million in sales

Additionally, investors offloaded $131.74 billion in money market funds, marking a continuation of outflows for the second week in a row.