A severe economic warning, not the “art of negotiation”, determined on Trump to impose the rates
President Donald Trump was forced to return to his radical tariff plans due to an “emergency sales” on the obligation market, which could have triggered an economic collapse.
Trump's tariff proposals Photo: X/@Popbase
In addition to the turbulence on the stock market, Trump's radical tariff plans have triggered a massive sale of American government bonds, as it has never been seen from the Covid-19 Pandemic crisis.
Experts say that this, rather than the mere “art of understanding”, caused the White House to return to its tariff proposals, according to the Daily Mail.
Donald Trump announced on Wednesday, April 9, a 90-day break for all new “mutual” rates, in a major change that caused one of the biggest increases in the stock market in history. However, the president did not spare China, but imposed Beijing a new series of import taxes.
Charlie Gasparino, a senior correspondent at Fox Business, said that the collapse of the obligations market forced on Trump to “capitulate” in terms of its plans.
“Let's clarify what happened. Who has capitulated here and why? I do not want to say this because I am a patriot, I am an American, but the White House is the one who has capitulated, based on everything I hear and all my sources. And the reason is the bond market. When the 10 -year -old yields increase to 5 percent, things start to close. When you have lending markets given over your head“Said the journalist.
The “emergency sale” on the bond market reached its peak between April 8 and 9. The 10 -year treasury yield climbed overnight to over 4.51%, while the 30 -year treasury yield reached a maximum of 5.02% on Tuesday evening, CNBC reported.
US government bonds have been traditionally considered to be one of the safest assets in the world and as a place where investors can place their money in periods of volatility.
Their decrease was a clear sign that investors could begin to lose their confidence and showed how much the world's largest economy was affected by Trump's tariff plans.
Gasparino claimed that, according to his sources, while Trump negotiated with Japan, he got rid of American Treasury Bonds «Because they believed it is not a great place to do business». “That forced their hands“He said, referring to the White House.
Trump: “I saw last night that people were a little restless.”
The secretary of the treasury, Scott Bessent, insisted that the decision to postpone the rates was determined by «the president's strategy», Rather than the shocking growth of the yields. “He and I had a long discussion on Sunday, and this was his strategy all the time“, Bessent told reporters on Wednesday in front of the White House.
But Trump confirmed that he was closely pursued the obligation market when he decided to implement the tariff break. “The bond market at this time is beautiful', Trump told reporters, adding: “I saw last night that people were a little restless”.
Economist Mohamed El-Rian, president of Queens' College in Cambridge and Economic Chief Counselor of Allianz, also blamed the sale on the market for Trump's return.
“S.He was debating what could convince the US administration to opt for a kind of break on tariffs. Would the Congress, the president's advisers, the business leaders, the legal system, the markets or something else? ”he wrote in a post on the X platform.
“I received the answer today: it is the market for government bonds – in particular, how close it is approaching the line that separates the wild volatility of the defective market function ”, he added.
The efficiency of the 10 -year bonds withdrew on Wednesday, from its highs. An increase in treasury yields, which are moving in the opposite of prices, means that all government loan costs will increase. Increasing loan costs can cause an increase in mortgage rates, which have been previously on a downward trajectory in recent weeks.
