Investing.com -- Janet Yellen, the former U.S. Treasury Secretary, expressed her apprehension on Monday regarding President Donald Trump’s tariffs and other policies. She voiced concern that these measures were causing a decrease in the trust that U.S. allies have in American commitments, leading some investors to begin avoiding U.S. assets.

Last week, Yellen noted a troubling increase in yields on U.S. Treasury debt during an interview with CNBC television. The yields, which move inversely to prices, challenge the traditional safe-haven status of U.S. Treasuries, a cornerstone of the global financial system.

While Yellen didn’t observe a complete liquidity drain in the markets, she pointed out a pattern that suggests a loss of confidence in U.S. economic policy and the safety of fundamental financial assets. She described this trend as "really very worrisome."

Yellen expressed satisfaction with the positive outcomes from last week’s 10-year and 30-year bond auctions. However, she advised against shifting to more short-term bill issuance as a response to higher long-term Treasury yields, emphasizing the importance of regular and predictable issuance that meets market demand.

Reiterating her previous remarks, Yellen stated that Trump’s tariffs and other policies are inflicting significant damage on the U.S. economy and its alliances. She raised concerns over doubts surrounding U.S. commitments to NATO, Ukraine, and the U.S.-Mexico-Canada trade agreement.

Yellen expressed her fears about the United States becoming isolated and perceived as untrustworthy, creating opportunities for China to build relationships with key U.S. allies such as Japan and South Korea.

While she doesn’t currently see a risk to financial stability, Yellen mentioned that the Federal Reserve has a variety of liquidity facilities, which were utilized at the onset of the COVID-19 pandemic in March 2020, ready to be used if such risks appear.

Yellen concluded by revealing that she has not discussed her concerns with Trump’s Treasury Secretary, Scott Bessent.

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