We Need The Military!
Donald Trump has spent decades telling Americans that he is a brilliant businessman.
Then somebody asked him about the bond market.
Suddenly, we needed the Marines.
Before leaving for South Carolina, Trump was asked about Treasury Secretary Scott Bessent’s efforts to calm rising long-term Treasury yields. Bessent had doubled certain government bond buybacks after the 30-year yield reached its highest level since 2007. The initial relief didn’t last, and a reporter asked Trump whether another form of intervention might be coming. (Reuters)
Trump answered:
“The ultimate intervention is our military. And if we have to use that, we will.” (Roll Call)
Ah.
For two centuries, economists apparently misunderstood the bond market.
Investors thought Treasury yields were influenced by inflation expectations, government borrowing, Federal Reserve policy, deficits, economic growth, and confidence in America’s finances.
Turns out we just needed the 82nd Airborne.
Picture the operation.
“Mr. President, the 30-year yield crossed over 5 percent.”
“Deploy the carrier group.”
“Sir, investors are worried about the national debt.”
“Scramble the F-35s.”
“Bond prices are falling.”
“Have the Marines secure Goldman Sachs.”
This would be hilarious if the man saying it weren’t responsible for the largest economy—and military—on Earth.
A Treasury bond is basically an IOU from the federal government. Investors lend Washington money. Washington promises repayment with interest. When investors become nervous about inflation, enormous deficits, or fiscal credibility, they generally demand higher yields for lending Uncle Sam their money.
This problem cannot be solved by invading JPMorgan.
In fact, military adventures can make matters worse if they increase federal spending, deficits, inflation, or geopolitical uncertainty. These are the very things bond investors worry about.
Trump’s comment might have been a bizarre joke, a verbal detour, or genuine confusion. He never explained. But coming from a president who regularly describes economics with the confidence of a man explaining a restaurant menu he has not actually read, it was spectacular.
Hours later, Trump told a South Carolina rally that “jobs are up” and “inflation is down” and proclaimed that his administration had “turned this country completely around.” (Roll Call)
The bond market, inconveniently, does not attend rallies.
It does not chant.
It does not wear red hats.
It does not care how many times Trump says “tremendous.”
Bond traders look at numbers.
And when the numbers frighten them, they demand more interest.
That may be Trump’s greatest economic problem. Markets cannot be bullied the way politicians can. You cannot give the 10-year Treasury yield an insulting nickname. You cannot fire it. You cannot threaten it as if it were an opponent. And apparently, despite presidential speculation, you cannot send Navy Seals to make it come down.
Perhaps Trump truly has invented a revolutionary economic doctrine.
Forget monetary policy.
Forget fiscal discipline.
Forget reducing deficits.
Introducing:
Gunboat Bond Management.
If mortgage rates remain high, send destroyers.
If Treasury yields rise, mobilize the National Guard.
And if Wall Street still refuses to cooperate?
Call Pete Hegseth.
Apparently America’s next bond auction is being held at the Pentagon.
