US Treasury Secretary Scott Bessent on Tuesday rejected the idea that European governments could aggressively sell American debt to counter Washington's threats over Greenland, saying such a move would "defy logic".But asked by reporters at the Davos World Economic Forum whether the US was preparing for such a scenario, Bessent said that it "defies any logic".
Well it dilutes the demand for new bonds to have those old ones resold. But yes whomever holds those bonds gets paid, no one can call in us debt, it’s due when it’s due.
But if all of europe quit buying US bonds and sold what they have, the US might not be able to raise the next round of trillions of borrowed dollars first chance the administration gets.
Is it plausible to assume that the US will no longer be able to sell its bonds? In the worst case scenario, it will raise interest rates by 0.1 percent. Or the Fed will step in, as it did in 2008 and 2021.