The rise in bond yields combined with Mr. Trump’s spending spree could soon take the annual interest tab to US$1-trillion.Kent Nishimura/Reuters
You would think that U.S. President Donald Trump would know better. Here is a man who built his fortunes largely on real estate and such empires are not concocted with cash. They are financed by commercial mortgages and bonds are backed by them. In other words, Mr. Trump must be well aware of the risks of expensive debt, all the more so since a few of his properties went bankrupt.
Or does he?
He might have learned his lesson in April, when he launched a global tariff war that alarmed investors everywhere by sending seismic tremors through the US$29-trillion U.S. Treasuries market. The yields on 30-year notes shot above 5 per cent; they had spent the previous two months between 4.4 per cent and 4.8 per cent (bond prices and yields move in opposite directions).
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