Trump's Trade Gambit Sends Treasury Yields Soaring! Is This The End of Low Financing?

Markets Gone Wild! Or Just Another Tuesday?

Right then darlings! It appears the financial markets are having a bit of a… kerfuffle. The 10 year Treasury yield has gone rather vertical hasn't it? Climbed higher Friday adding to its steep weekly rise as dizzying trade moves by President Donald Trump caused investors to dump U.S. assets in favor of other global safe havens. One might say it's as if someone discovered a booby trap – everyone's running for cover. Reminds me of that time in Peru. But enough about that let's talk about what's really going on.

The Numbers Game: Yields Spikes and Reversals

Alright let's get our hands dirty with some numbers shall we? The 10 year Treasury yield galloped over 10 basis points to 4.495%. The 2 year Treasury yield climbed nearly 11 basis points on the day at 3.952%. It's all rather technical I know but essentially prices and yields are doing a little dance in reverse. And this week? Oh this week's been a right rollercoaster! A spike of more than 50 basis points – the markets are wilder than a Yeti in a china shop! Investors are dumping U.S. debt like it's last week's stew and you know what that means. Trouble.

China and Japan: Not Playing Nice?

The rumors are flying faster than bullets in a Tomb Raider movie! Whispers suggest that China and Japan two of our largest creditors might be offloading Treasuries faster than I can raid a tomb. The increased trade tensions are making everyone a bit jumpy. It seems even nations are looking for a 'safe haven' these days. I wonder if I can interest them in a nice secure tomb? Plenty of gold I assure you.

Trump's Trade Tango: A Pause a Rise and More Confusion

The White House is doing a bit of a two step it seems. A 90 day tariff pause on most countries (excluding China of course who saw tariffs rise to 145%). China then responded by hiking duties on American goods from 84% to 125%. One might say this is not going according to plan. I've seen less convoluted treasure maps honestly. It's all rather… messy. You know what they say 'The more you know the more confused you are.'

White House Alert! Bond Market Blues

Apparently the White House is paying attention to these market shenanigans. Scott Bessent is keeping a close eye on the bond market. Even Kevin Hassett chimed in mentioning that the bond market's signals 'certainly would have contributed at least a little bit to that thinking.' But he did also add that it wasn't a panic move it was a 'very systematic well planned move'. I'd hate to see what their panic moves look like honestly!

The Million Dollar Question: What Does It All Mean?

Seema Shah the Chief Global Strategist at Principal Asset Management thinks the bond market struck a nerve. 'Low financing costs appear to be a key pillar of the Trump administration's overall agenda.' So rising yields are a bit of a headache to put it mildly. But despite the pause rates are still climbing. Seems like this treasure hunt has led everyone straight to a cliff edge. Well time to dust off the grappling hook because this is going to be interesting! Don't you think?