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European sell-off of US treasuries could trigger global economic crisis

Published: 27 January 2026

As US President Donald Trump threatened to take control of Greenland by any means necessary, European countries weighed a response. After decades of low levels of investment in their militaries, Europeans wouldn’t fare well in a head-to-head confrontation with an invading force from the United States. But collectively, Europe’s economy is huge, and they hold large numbers of US Treasury Bonds—the financial instrument through which the US government issues debt.

Selling off European-held treasuries would hit the US economy hard, but it would also have repercussions for the rest of the global economy. “If you have sellers of Treasuries, that potentially can have selloffs in stocks and that will then impact, potentially, other trades,” Associate Professor of Finance Patrick Augustin told the Financial Post. “There’s certainly going to be ripple effects everywhere in that situation.” 

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