Trump has claimed.<\/a> And that will likely depress bond prices even more.\n <\/p>\n\n That\u2019s a problem for all of us, investors and normies alike. My colleague David Goldman has a useful analogy: Think of the bond market like an old-timey balance scale, with prices on one side and yields (the interest a bond pays) on the other.\n <\/p>\n
\n Right now, bond prices are getting weighed down by a bunch of economic concerns, including:\n <\/p>\n
Rising inflation<\/p>\n
National debt outpacing economic growth<\/p>\n
Consumer debt<\/p>\n
The cost of the Iran war<\/p>\n
Potential rate hikes<\/p>\n
The cost of financing AI<\/p>\n
\n The more bond prices go down, the more yields go up. Investors are basically telling governments \u201chey if you want to hold onto my money, you\u2019re going to have to pay me more for it.\u201d\n <\/p>\n
\n That means it\u2019ll cost the government (read: taxpayers) more to finance the national debt, leaving less for social services. And because mortgage rates, auto loans and credit cards are all pegged to the 10-year Treasury yield, consumers end up paying more to finance those necessities. This can slow economic growth and potentially trigger a recession (although we don\u2019t appear to be anywhere close to that just yet).\n <\/p>\n
\n The bond market anxiety was so acute Tuesday \u2014 the 30-year US Treasury yield just hit 5.2%, its highest level since 2007 \u2014 it even managed to pierce the euphoria around tech stocks that\u2019s driven the market to multiple record highs in recent weeks. The S&P 500 fell for its third straight session.\n <\/p>\n
\n And while stock and commodity markets are quick to react to pronouncements from Trump and other world leaders, the bond market is a different beast.\n <\/p>\n
\n Since the war in Iran started nearly three months ago, Trump has insisted several times that the war was \u201cvery close to being over.\u201d Almost always, those statements have sent stocks higher and oil prices lower in a quintessential Lucy-and-Charlie-Brown-with-the-football moment.\n <\/p>\n
\n On Monday, Trump said he was calling off an attack on Iran while \u201cserious negotiations\u201d take place. Stocks pared most of their losses, and a rally in oil prices lost steam. It didn\u2019t faze bond markets, though, which continued to sell off around the globe.\n <\/p>\n
\n That\u2019s partly because investors aren\u2019t just worried about war and oil-related inflation. They\u2019re seeing a confluence of factors that signal pain on the horizon.\n <\/p>\n
\n \u201cThe story right now is simple and uncomfortable,\u201d Ajay Rajadhyaksha, global chairman of research at Barclays, said in a note Monday. \u201cThe developed world has too much debt, too little fiscal discipline, and no political appetite for fixing either\u2026 The global energy shock is the cherry on the cake.\u201d\n <\/p>\n","protected":false},"excerpt":{"rendered":"New York\u00a0\u2014\u00a0 Take it from President Donald Trump himself: Stocks and commodities can throw easily ignored tantrums, but…\n","protected":false},"author":2,"featured_media":681782,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":["post-681781","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/681781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=681781"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/681781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/681782"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=681781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=681781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=681781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}