>Instead of being seen as a safe haven, U.S. debt itself started to look shaky. Maybe it was the deficit outlook, maybe the global response to tariffs — but whatever it was, yields started climbing. Fast.
Seems pretty simple to me - bond yields moved up sharply because they follow inflation expectations. Bond holders take on inflation risk, so when future inflation is expected to increase, yields go up to compensate. Out of control tariffs equals out of control inflation, which equals rocketing bond yields. The fact that Trump's team didn't realize this would happen is both hilarious and frightening. This is Econ 101 stuff.
Seems pretty simple to me - bond yields moved up sharply because they follow inflation expectations. Bond holders take on inflation risk, so when future inflation is expected to increase, yields go up to compensate. Out of control tariffs equals out of control inflation, which equals rocketing bond yields. The fact that Trump's team didn't realize this would happen is both hilarious and frightening. This is Econ 101 stuff.