USD weakening. Yuan weakening. Treasury yields increasing.
China is selling off US bonds (holds $800B+) and moving them into other currencies. This maintains their competitiveness in global markets while increasing borrowing costs for US and reducing their purchase power. The latter further increases import costs as now US companies have to face currency related inflation and tariff inflation.
The net result if China continues is a choking of the US economy through stagflation. Unless Trump backs down we could be in serious trouble.
This is the double edged sword of having US currency being the global reserve. If countries can manipulate our currency to strengthen it (as Trump claims), increasing our purchasing power while making their goods more competitive to US econ, then they can also manipulate it the other way.
Powell is going to have his hands full with this one. Keep your eyes on usd index and yields in coming weeks.