The consequences of Trump’s game of chicken over tariffs on the US economy — and its markets — continue to be the talking point, highlighting the uncertainty in the air across the world. While chaos over the stock market crash and its subsequent settling down took the centerstage, there’s another part of the US markets that could send ripples far beyond Wall Street: the US bond market.
Bond yields, essentially the return investors earn, are often associated with safety and steadiness. After Trump’s recent moves, the yield jumped to their highest levels in years. As the confidence in the US economy plummeted, the price of bonds fell and the rate the US government had to pay on its bonds rose sharply.
Let’s break it down to understand why it matters and how it could have triggered Trump’s change of mind.
First and foremost: What exactly are bonds?
US Treasury bonds, in…
