After experiencing the worst sell-off in over 20 years, is the bottom signal for U.S. Treasuries here?

The U.S. Treasury market has just experienced its worst sell-off since 2001, but according to the latest assessment from JPMorgan Asset Management, this nightmare may soon come to an end.

Bob Michele, the global head of fixed income at JPMorgan, recently stated that with strong buying interest from overseas investors and the Federal Reserve indicating its readiness to support the Treasury market at any time, investors may have received a key buy signal.

"I am quite confident that we are now at a price bottom and yield peak. In our conversations with overseas investors, they are not scared into selling U.S. Treasuries."

The U.S. Treasury Market May Have Hit Bottom, JPMorgan Executives Hold an Optimistic View

The escalating trade tensions have heightened concerns about the U.S. deficit, while the tax cut policies being debated in Congress may further widen this deficit.

Last week, a 2.4% sell-off in U.S. sovereign bonds sparked speculation in the market about some countries potentially reducing their holdings of Treasuries. Michele cited Federal Reserve data showing that overseas central banks and reserve managers have recently increased their holdings of U.S. Treasuries. He also noted that Boston Fed President Susan Collins recently stated that if market conditions become chaotic, the Fed "will absolutely be ready" to help stabilize the financial markets.

Federal Reserve data shows that in the week ending April 9, the amount of tradable U.S. Treasuries held by overseas central banks, monetary authorities, and international organizations increased by $3.6 billion, following two consecutive weeks of decline.

Citigroup's Jabaz Mathai team pointed out in their report on the 11th that despite the sell-off in the Treasury market, the futures basis did not show significant signs of pressure. The decline in TIPS' real yields was also greater than that of nominal yields. Between April 2 and April 9, foreign official holdings of U.S. Treasuries even increased by $3 billion.

This suggests that the market turmoil this week is more likely due to concerns about declining demand for U.S. Treasuries leading to a "buyer strike," rather than actual selling by foreign investors.

These signs indicate that despite the market's extreme volatility, U.S. Treasuries remain solid, and long-term investors have begun to re-enter the market at the current yield levels