Peter Schiff Warns of “1987-Style Crash” as Bond Market Selloff Deepens

U.S. stock market futures fell sharply on Wednesday, signaling rising investor fears. Dow Jones futures dropped 1.9%, while S&P 500 and Nasdaq futures fell more than 2% each. This steep decline comes as bond yields surge—the 10-year Treasury yield jumped to 4.4%, and the 30-year yield briefly crossed 5% overnight. These moves suggest serious stress building in the bond market.

President Trump’s latest tariffs have added heavy taxes on imports from Europe, Japan, Vietnam, and especially China. As a result, Chinese products now face over 100% in total tariffs due to repeated hikes and retaliatory measures. The growing trade tensions could significantly hurt trade between the U.S. and China.

China Selling US Treasuries

Adding to market jitters are reports that China has sold $50 billion worth of U.S. Treasuries. This large-scale selloff has helped push bond yields higher and added pressure to already fragile markets. At the same time, China is building its gold reserves—part of a clear shift away from reliance on the U.S. dollar and American assets.

Analysts at Goldman Sachs note that foreign interest in U.S. assets is fading. According to Reuters, several foreign governments are working to reduce their dependence on the U.S. dollar. This trend raises concerns about long-term demand for U.S. bonds and other dollar-denominated investments.

Could We See Another 1987 Crash?

Some experts are comparing today’s market conditions to those before the 1987 crash, known as Black Monday. Without quick action, they fear history could repeat itself. One of the loudest voices of concern is economist and crypto critic Peter Schiff, who has shared multiple warnings in recent posts on X.

Schiff is known for his negative outlook on the U.S. economy and strong belief in gold as a safe investment. He argues that unless the Federal Reserve cuts interest rates urgently and starts a major QE (quantitative easing) program, the stock market could suffer a crash like 1987.

According to Schiff, the current bond market meltdown is even more dangerous than a stock crash. He believes Trump’s plan to force lower interest rates through economic pressure has backfired. If tariffs stay in place, Schiff warns, the U.S. could face a financial crisis worse than 2008.

Has Trump’s Plan Backfired?

BitMEX founder Arthur Hayes also raised red flags, pointing to the rising MOVE index—now at 139.88—as a sign the Federal Reserve needs to act quickly to stabilize the market.

Meanwhile, financial blog ZeroHedge described the situation as an “absolutely spectacular meltdown” and blamed the Fed for encouraging risky bond trades that are now collapsing.

“Hi fed this is what the collapse of the $2 trillion basis trade you encouraged for so many years looks like.” it noted. 

Will The Fed Intervene?

With markets under pressure, many are wondering whether the Fed will call an emergency meeting. Speculation is growing that rate cuts or a new QE program could be on the table to inject stability and liquidity into the financial system. However, the Fed hasn’t made any official announcements yet.

Still, the market is already reacting. According to the CME FedWatch Tool, the chance of a rate cut in May has jumped from just 10.6% last week to 58.9% now.

Crypto on Shaky Ground

If the Fed does cut rates, it could boost market sentiment and trigger a strong rally in Bitcoin and the broader crypto market. But if the Fed holds its ground, both stocks and crypto may continue to fall. Bitcoin could slide toward the $70K range in that case.

The recent bond market chaos has already pushed the 10-year Treasury yield up 17.16% in just 72 hours. Meanwhile, Bitcoin is trading at $76,367—down more than 3% in the past 24 hours. The global crypto market cap has fallen to $2.51 trillion, down over 5% in one day. Other major cryptocurrencies are also struggling: Ethereum is down over 7%, XRP more than 5%, Solana (SOL) over 3%, and Cardano (ADA) more than 4%.

Between rising tariffs, soaring yields, and declining investor confidence, global markets are entering dangerous territory. All eyes are now on the Federal Reserve. The next move it makes—or doesn’t make—could determine whether the market finds support or faces a deeper collapse.

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