Bonds Hammered: Is It Fed Policy, Trump Policy, Or Both? -

Bonds Hammered: Is It Fed Policy, Trump Policy, Or Both?

Jan 08, 2025Jeremy ParkinsonFinance0

Treasury Yields Since First 2024 Rate Cut

3-Month: -60 Basis Points (0.60 percentage points)

10-Year: +102 Basis points (1.02 percentage points)

30-year: +96 Basis Points (0.95 percentage points)

30-Year Mortgage Rates Mortgage rates courtesy of Mortgage News Daily30-year mortgage rates closely track 10-year treasury trends so it’s no surprise mortgage rates are up just over a full percentage point.Except for the second half of November, long-term treasuries have been hammered.
What Doesn’t the Bond Market Like?

Fed Policy?

Trump Proposed Economic Policy?

Both?

I vote for number three, but with primary emphasis on point number two, economic policy.We have massive peacetime deficits and everything Trump has proposed will raise them.
Team Trump Accelerates Social Security InsolvencyOn December 29, I asked Team Trump Accelerates Social Security Insolvency, Where’s DOGE?

Republicans expand Social Security at a cost of $196 billion. Guess who benefits.

Trump Threatens to Take Down Chip RoyOn December 19, I noted Trump Threatens to Take Down Chip Roy, One of the Only True Fiscal Conservatives

Massive Republican infighting between Trump and fiscal conservatives is underway.

Can DOGE Cut $2 Trillion?I asked these questions on December 27: Can DOGE Cut $2 Trillion Out of $1 Trillion? What About Revenue?If you think Trump or DOGE is going to do a damn thing about the deficit, please read the link immediately above.What Would You Do to Balance the Budget?For discussion, please see An Interactive Exercise: What Would You Do to Balance the Budget?Unlike DOGE and Trump, I did balance the budget in my proposals.How Much Revenue Can Trump Realistically Bring in From Tariffs?On January 6, I asked How Much Revenue Can Trump Realistically Bring in From Tariffs?

There are many moving parts to this question including Congress, retaliations, and consumer impacts.

Trump claims tariffs will bring in a huge amount of money to pay for his programs.Tariffs will not come close to covering extension of the 2017 Tax Cuts and Jobs Act (TCJA).Moreover, Trump wants to add additional items to the TCJA renewal and expand military spending too.The bond market thinks as much of Trump’s plan as I do, and that’s why yields are rising.In a following post, I will outline my specific proposals and compare to Trump’s.More By This Author:How Much Revenue Can Trump Realistically Bring in From Tariffs?Intel on the Brink of Death Says Scathing ReportA Mass Exodus Of Big Banks From The Net-Zero Bank Climate Alliance