In the usually steady government bond market, the yield on the 10-year Treasury has risen to about 4.5 percent from less than 4 percent at the end of last week.
Isn’t a much simpler answer that China started dumping bonds, and they’ll dump a lot more if the tarriff situation isn’t resolved soon?
As a real estate investor who’s mortgaged to the max, Trump wants high inflation to increase the nominal value of his properties, and low interest rates. China has extensive US bond holdings and at least some ability to drive up 10 year rates by selling those bonds. Trump doesn’t want higher rates, even if you only consider his direct, personal situation.
That was my initial reaction, thinking China MUST hold more treasury bonds than anyone else, right? Turns out that’s typically Japan ($1 trillion), and the UK has generally held roughly the same number as China (both in the $700B range). Maybe the US anticipated and had contingencies ready if it was just China doing the selling, but when the other big holders started a slow bleed, it might’ve given them pause? Dunno.
We also don’t know who held what more recently than January and I don’t know if the data gap is the usual lag or if the the people who do this work at the Treasury department got “DOGE’d”.
Bottom line, it’s been fun to think about but I don’t think we should put too much stock in conspiracy theories originating on Substack.
Isn’t a much simpler answer that China started dumping bonds, and they’ll dump a lot more if the tarriff situation isn’t resolved soon?
As a real estate investor who’s mortgaged to the max, Trump wants high inflation to increase the nominal value of his properties, and low interest rates. China has extensive US bond holdings and at least some ability to drive up 10 year rates by selling those bonds. Trump doesn’t want higher rates, even if you only consider his direct, personal situation.
That was my initial reaction, thinking China MUST hold more treasury bonds than anyone else, right? Turns out that’s typically Japan ($1 trillion), and the UK has generally held roughly the same number as China (both in the $700B range). Maybe the US anticipated and had contingencies ready if it was just China doing the selling, but when the other big holders started a slow bleed, it might’ve given them pause? Dunno.
We also don’t know who held what more recently than January and I don’t know if the data gap is the usual lag or if the the people who do this work at the Treasury department got “DOGE’d”.
Bottom line, it’s been fun to think about but I don’t think we should put too much stock in conspiracy theories originating on Substack.