by Daniel Brouse
April 9, 2025
Trump’s fixation on the 10-year Treasury bond comes down to a perfect storm of contradictions — and desperation. Here’s why it matters:
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He promised lower interest rates but has no real ability to deliver them.
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He can’t control interest rates — the market does.
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His budgets don’t work with elevated rates — every tick higher adds billions (or even trillions) to the national debt through higher borrowing costs.
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Higher interest rates, combined with a weakening dollar, fuel persistent inflation — creating a vicious feedback loop of rising prices and rising rates.
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Foreign countries — especially Japan and China — hold massive amounts of U.S. Treasuries. The overnight spike in bond yields started in Asian markets, signaling not just a financial crisis, but the possibility of a global credit war layered on top of the existing trade war.
Bottom line: The 10-year bond rate isn’t just a financial number — it’s a pressure gauge on Trump’s entire economic strategy. And right now, that gauge is flashing red — Credit War!
Ironically, this would be a completely self-inflicted credit war. By wrongly insisting that trade deficits are somehow tied to national budget deficits and debt, Trump is essentially forcing foreign countries to accept fewer U.S. dollars through reduced trade. And when those countries accumulate fewer dollars, they naturally invest less in U.S. assets — especially safe-haven investments like Treasuries. Less demand for Treasuries means higher interest rates, weaker credit strength, and greater financial instability — all triggered by a fundamental misunderstanding of how global trade and capital flows actually work.
April 10 State of the Economic Union: Still Horrible
- America’s Trade War Is Costing More Than We Realize — It’s Costing Global Trust
- Gold: A Growing Influence in Today’s Market
- Tariffs and the Liquidity Crisis in Long U.S. Treasuries
- Stock Market Update: A Worsening Economic Landscape
- Tariff Turmoil: The Chaos and Confusion Surrounding U.S. Trade Policies in 2025
- The Great Depression vs. The Climate Crisis: Why the Stock Market May Never Recover
- Mandated Buyers vs Emotional Sellers: The Battle Behind Every Crash
(Why doesn’t the stock market just crash in a straight line?) - Primer: The Chaos Theory of Crashing Markets