The UK's "mini-budget" failure should be a cautionary tale for the US and bond experts, according to their warnings.

• There are growing concerns that the US may face a mini-budget crisis similar to Britain's, as bond strategists predict that the return of Donald Trump to the White House could lead to currency instability and rising bond yields.
• The mini-budget crisis in Britain occurred during the tenure of former Prime Minister Liz Truss and ex-Finance Minister Kwasi Kwarteng.
• The potential for profound changes in the U.S. bond market is significant, according to Althea Spinozzi, head of fixed income strategy at Saxo Bank, who stated that Trump's return to the White House could reshape the market in this way.

There are growing concerns that the US may face a mini-budget crisis similar to Britain's, as bond strategists predict that the return of Donald Trump to the White House could lead to currency instability and rising bond yields.

Trump has promised to implement growth-promoting measures, such as tax reductions, high tariffs, and deregulation.

The former president's economic plan has raised concerns about rising consumer prices, which experts predict could lead to significant changes in bond yields and investor behavior.

A mini-budget crisis similar to Britain's in 2022 is a possibility.

According to Alim Remtulla, chief foreign exchange strategist at EFG International, foreign central banks and institutional investors are gradually shifting away from buying US 10-year Treasurys due to concerns over inflation, debt, and geopolitics.

"Due to the increased sensitivity of price-sensitive investors, Treasuries require higher yields to attract investment. While this is not yet at crisis levels, there are concerns that the US dollar may experience a run on its currency and yields like the UK did in the Fall of 2022."

The mini-budget crisis in Britain occurred during the tenure of former Prime Minister Liz Truss and ex-Finance Minister Kwasi Kwarteng.

In early September 2022, Truss and Kwarteng caused a drop in government bond prices by announcing plans for significant tax cuts in an unexpected fiscal statement.

The sell-off in U.K. government bonds led to an emergency intervention by the Bank of England, causing the British pound to fall to an all-time low against the U.S. dollar after the measures were announced.

After less than two months in their respective offices, Truss and Kwarteng resigned due to the turmoil, and most of the measures were reversed.

'Investors are becoming a little nervous'

Saxo Bank's head of fixed income strategy, Althea Spinozzi, stated that Trump's return to the White House could significantly alter the U.S. bond market, with Treasury yields predicted to increase as markets adapt to higher inflation anticipations.

According to Spinozzi, the benchmark U.S. 10-year Treasury may surpass the 5% mark, without providing a specific timeframe, stating that this level has a significant impact in the current economic climate.

The possibility of currency instability may arise during a Trump presidency due to concerns about the U.S. financial situation, which could result in a decline in Treasury sales, similar to what occurred in the U.K. in 2022, according to Spinozzi.

She stated that the U.S. dollar's status as the world's reserve currency and the vastness of the Treasury market contribute to its stability.

If inflation expectations become unanchored or global investors begin seeking alternatives, a sustained rise in yields could weigh on the dollar's strength over time, Spinozzi said.

On Wednesday morning, the 10-year Treasury yield increased by more than 4 basis points to 4.424%. It's important to note that yields and prices move in opposite directions, and one basis point equals 0.01%.

When market participants anticipate an increase in consumer prices or a larger budget deficit, bond yields typically increase.

While a U.S. version of Britain's mini-budget episode is possible, the dollar's position as the world's reserve currency makes it difficult to imagine a sudden crisis emerging.

According to Ashworth, if the term premium component of Treasury yields rises, it could signal that investors are becoming slightly apprehensive about the increased bond supply.

'Tough to see happening'

Thierry Wizman, global interest rates and currencies strategist at Macquarie Group, stated via video call to CNBC that there is a possibility of that occurring and it cannot be ruled out.

Wizman stated that if the occurrence happens, it is more likely to be due to the U.S. acting independently in managing its deficit spending.

"If every country is behaving irresponsibly, then the likelihood of this happening is low, especially on a sustainable basis. However, when all countries are facing high debt levels and deficits, it becomes less likely because there is no place to escape, except for physical assets like gold."

Wizman stated that a divergence is required to facilitate a U.S. version of Britain's mini-budget crisis, as seen in the behavior of private institutional investors.

Another country or region like the euro area would need to replace the U.S. in terms of fiscal responsibility, which seems unlikely to happen.

— CNBC's Jenni Reid contributed to this report.