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Do Bonds Put an End to the Tariff Game?
Even with all the talk about new tariffs — like the ones Lutnick mentioned on semiconductors and electronics — the real action isn’t there. The bond market is still calling the shots.
It’s actually a bit amusing watching the administration act like tariffs give them any real leverage. The truth is, that card’s already played out.
Why? Because if bond yields keep climbing, the whole tariff strategy will have to be scrapped. They won’t have a choice. Just look at the 90-day tariff rollbacks — it’s a clear sign they’re buying time, hoping for yields to settle.
At the end of the day, if yields spike another 1-2%, the Fed will have to step in. They’ve already dropped hints they’re willing to fire up the money printer (QE) if things get ugly, but they’d rather do it as part of a controlled plan — not as a last-minute rescue.
So when you hear about new tariffs, take it with a grain of salt. Once the bond market starts selling off hard, the administration will be forced to walk back every tough trade stance, step by step.
This shows they’re not really in control of the negotiations. You’ll probably see them announce “new deals” here and there just to keep markets calm — but the real prize is still a deal with China.
Bottom line: forget the headlines, watch the bond market. The 10- and 30-year yields are the real indicators that will shape what the administration does next.
