This is a very important market!
By metmike - June 1, 2026, 2:43 p.m.
++++++++++++
Trump is facing a new inflation warning from the bond market
The world is getting more uptight about lending money to President Donald Trump’s government
When Kent Smetters, faculty director of the Penn Wharton Budget Model, broke down the math tied to rising 30-year Treasury yields, he estimated that 60% of the increase had come from the expectation that America will continue its outsized borrowing and the other 40% was tied to the inflation driven by the Iran war and Trump’s tariffs.
Glenn Hubbard, a former chairman of the White House Council of Economic Advisers during the George W. Bush administration, worries that the U.S. may no longer have the same borrowing capacity as before to effectively combat an economic crisis, such as the 2008 crash or the coronavirus pandemic.
++++++++++++++++++++
In other words, 100% of it tied to Donald Trump's ruinous policies. Donald Trump wants lower interest rates but everything he does causes HIGHER interest rates.
Gap higher after Donald Trump's completely unprovoked, unjustified and illegal attack against Iran which has caused the worst global energy crisis in history that has no end in sight because his diseased brain doesn't have the negotiating ability or objective, critical thinking to figure it out and he's appointed nothing but Trump adulators that keep their jobs by doing what he says. When they come up with good ideas that contradict Donald Trump.........they get replaced.
https://tradingeconomics.com/united-states/government-bond-yield
1. 10 year bond-1 year. Gap higher at the start of the Iran War.
2. 10 year graph: COVID lows in 2020. The Fed OVER stimulated the economy by printing trillions because of COVID and this caused major inflation and MUCH higher interest rates. They peaked in 2024 as interest rates continued to drop. However, inflation has picked up again because of Donald Trump's illegal tariffs and unjustified war. The most recent chart formation is a symmetrical triangle that appears to be on the verge of an upside breakout or it could just be testing the downtrend line. The adverse impacts to our economy, is they cause a recession would help to keep the interest rates from getting too high. However, the new Fed chairman appointed by Donald Trump is a wild card. If he is another Donald Trump minion that follows Trumps wishes, he could do some really dumb things like print more money or do interest rates cuts that INCREASE inflation and makes things worse. We need to give him the benefit of the doubt and hope the Fed continues to maintain independence.
https://www.pgpf.org/article/with-39-trillion-in-debt-is-the-u-s-headed-for-more-credit-downgrades/
If market observers, including the ratings agencies, continue to lose faith in the safety of Treasury securities, the United States will have to offer higher rates of return to attract investors, which would put upward pressure on interest rates.
This upward pressure on yields would occur in an already high-interest environment, which has substantially increased the cost of servicing the nation’s existing debt load. Between 2017 and 2021, annual net interest costs averaged $332 billion. Last year, net interest payments cost the government $970 billion and, over the next decade, are projected to average $1.6 trillion per year. Unfortunately, the CBO projects that interest rates will remain well above those levels in the future, significantly contributing to growing deficits and debt. Additional upward pressure on interest rates would further exacerbate the national debt — and add to concerns from market observers about our fiscal health.
Three successive downgrades of the U.S. credit rating should alarm our elected leaders. For decades, the United States has benefited significantly from the dollar serving as the world’s primary reserve currency. Unless we change course and improve our fiscal condition, we may put that position at risk.
https://tradingeconomics.com/united-states/30-year-bond-yield
30 year Bond Yield. 10 years: COVID low in 2020. The Fed OVER stimulated the economy by printing trillions because of COVID and this caused major inflation and MUCH higher interest rates. They peaked in 2024 as interest rates continued to drop. However, inflation has picked up again because of Donald Trump's illegal tariffs and unjustified war. The most recent chart formation is an ASCENDING triangle/wedge, which is a bullish formation that appears to be on the verge of an upside breakout or it could just be testing the downtrend line. The adverse impacts to our economy, if they cause a recession would help to keep the interest rates from getting too high. However, the new Fed chairman appointed by Donald Trump is a wild card. If he is another Donald Trump minion that follows Trumps wishes, he could do some really dumb things like print more money or do interest rates cuts that INCREASE inflation and makes things worse. We need to give him the benefit of the doubt and hope the Fed continues to maintain independence.
Higher interest rates offered by Bonds will attract stock market money when the stock market crashes and investors flee to safer investments. It's no longer an IF for the stock market to crash but just a WHEN.
When investors increase bond purchases, the interest rate GOES DOWN!
