There’s a theory being batted around without too much evidence (hold tight, Snopes is on it) that Mark Carney talked European and Japanese leaders into accumulating US Treasury bonds, and then slow-selling them to make Trump squirm once he imposed the broad-brush tariffs to spook the T-bill market.
The theory sounds mostly plausible in that Carney was in Europe for closed door meetings with European leaders shortly after being designated PM, and that Trump backed off so quickly and used the language of “the bond market is tricky” to justify the change in direction. Dropping demand for T-bills leads the Fed to increase yields to keep the borrowing taps on, means expensive borrowing for them, means no money for tax cuts for billionaires.
On the other hand, the story originates from a twice-fired shock-jock’s Substack.
But it sounds like something a wicked smart Harvard/Oxford educated economist would dream up and pull off…
¯\(ツ)/¯
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.