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Trump Shifted on Tariffs After Bond Holders Got Jittery. He Held Millions Himself.

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As of August, the president’s investment portfolio showed significantly more in bonds than in stocks. It is unclear if his personal holdings had any bearing on his decisions regarding tariffs.When President Trump paused a punishing round of global tariffs last week, he attributed his change of heart to one main thing.“I was watching the bond market,” he said. “The bond market is very tricky.”Mr. Trump should know — he had a big personal stake in it.A New York Times analysis of Mr. Trump’s financial holdings shows that he had roughly $125 million to about $443 million invested in bonds as of last year, a range that far eclipsed his investment portfolio’s exposure to the stock market.Mr. Trump does own a huge stake in his publicly traded social media company, Trump Media & Technology Group, but he has said he has no plans to sell those shares, currently worth roughly $2 billion. The company’s stock, which he listed separately from his liquid stock and bond holdings on his latest financial disclosure, had already plunged about 40 percent this year before the new round of tariffs.Mr. Trump appeared unfazed when the tariffs sent the stock market into a tailspin, wiping out trillions of dollars in value in a matter of days.His nonchalance faded on April 9 after fears over the impact of Mr. Trump’s tariffs had spread to the government bond market, posing a potential existential threat to the global economy and signaling a weakening faith in U.S.-backed assets as a safe haven. Mr. Trump, whose own bond investments were also at risk, paused the most punitive of the import taxes for 90 days for all countries except China.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Investors Seeking Safety Look to German Government Bonds

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    Germany has long taken flak from Wall Street and financial capitals around Europe for the extreme fiscal conservatism that has kept the country’s debt levels low. But as global markets convulsed this week, investors rewarded Germany’s caution by snapping up its government bonds, which are known as bunds.Investors have reeled after President Trump imposed 10 percent tariffs on nearly every trading partner, temporarily rescinded even higher “reciprocal” tariffs hours after they came into effect and steadily ratcheted up tariffs on China to well above 100 percent.The resulting tumult hit U.S. assets hard, including Treasuries and the dollar, normally considered haven assets. That sent investors seeking other places for safety, such as gold, the Swiss franc and German bunds.The 10-year yield on German bunds, which moves inversely to prices, fell to 2.56 percent, near its lowest level in more than a month. That is notable relative to the 10-year U.S. Treasury yield, arguably the most important interest rate in the world, which has soared higher. On Friday, the 10-year U.S. yield was around 4.5 percent, climbing nearly half a percentage point in one week, a huge move in that market.Germany’s strict limits on government borrowing have given the country a stellar AAA credit rating. But last month, lawmakers decided that the next government could abandon the borrowing limit and take on trillions of euros in fresh debt to bolster the country’s military and crumbling public infrastructure. Germany’s export-driven economy is also heavily exposed to tariffs, given the large amount of trade its automakers and other industrial companies do with the United States.The prospect of extra borrowing and a slowing economy had begun to put pressure on German bunds. But the turmoil elsewhere in recent weeks prompted investors to turn back to the country’s debt as a source of safety.This week, Germany’s expected next chancellor, Friedrich Merz, also announced the blueprint for his government, which included an economic plan to jump-start the ailing German economy. And ahead of its planned borrowing binge, Germany benefits from low debt relative to the size of its economy, at about 60 percent of gross domestic product. By comparison, U.S. debt is about 120 percent of the size of its economy.It was “very striking” that in a moment of stress German bunds were acting as the “haven of choice” instead of U.S. Treasuries, said Sander Tordoir, chief economist at the Centre for European Reform, a research institute.“There does seem to be a real safety premium now being place on German government debt,” he said. More

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    Bond Market is Upended by Trump’s Tariffs

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    The bedrock of the financial system trembled this week, with government bond yields rising sharply as the chaotic rollout of tariffs shook investors’ faith in the pivotal role played by the United States in the financial system.U.S. government bonds, known as Treasuries because they are issued by the U.S. Treasury, are backed by the full faith of the American government, and the market for Treasuries has long been deemed one of the safest and most stable in the world.But the Treasury market’s erratic behavior all week has raised fears that investors are turning against U.S. assets as President Trump’s trade war escalates.The yield on the 10-year Treasury, which underpins corporate and consumer borrowing and is arguably the most important interest rate in the world, rose roughly 0.1 percentage points on Friday. The rise added to sharp moves throughout the week that have taken the yield on the 10-year Treasury from less than 4 percent at the end of last week to around 4.5 percent.These increases may seem small, but they are large moves in the Treasury market, prompting investors to warn that Mr. Trump’s tariff policies are causing serious turmoil. It matters to consumers as well. If you have a mortgage or car loan, for example, then the interest rate you pay is related to the 10-year yield.Ten-year treasuries are also considered a safe haven for investors during time of volatility in the stock market, but this week’s sharp rise in yields have made this market unusually perilous.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Bond Market Sell-Off Prompts Bank of England to Make Unusual Move

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    The Bank of England ditched its plan to sell some of its holdings of long-term bonds next week, after U.S. Treasuries led a rout in the global government bond market.Stock markets have taken a hit since President Trump announced steep tariffs on dozens of countries, but the turmoil also swept into the bond market this week. Yields on U.S. Treasuries, which move in the opposite direction to prices, jumped higher as investors sold the assets traditionally considered a haven in turbulent times.Mr. Trump on Wednesday paused some of his tariffs, saying the markets were getting “yippy.” The U.S. government bond market is enormous and can influence moves in other assets around the world.Yields on British government bonds, known as gilts, have jumped higher in recent days, particularly long-dated debt. The yield on the 30-year gilt soared to 5.58 percent on Wednesday, the highest since 1998.Even as the yield came down somewhat on Thursday, the Bank of England said it would sell 750 million pounds, or $970 million, from its holdings of short-term bonds instead of longer-maturing ones “in light of recent market volatility.”Since late 2022, the Bank of England has been selling bonds that it bought to bolster the economy during the 2008 financial crisis and the coronavirus pandemic. The plan got off to a rough start: It was delayed when the central bank stepped back in to buy bonds to halt the turmoil triggered when former Prime Minister Liz Truss proposed an aggressive tax-cutting budget that incited market chaos.Andrew Bailey, the Bank of England governor, has previously said that there would be a “high bar” for changes to its plan for gilt sales outside of the regular annual review process.The adjustment to the schedule on Thursday is an unusual move. The bank will sell the same amount of bonds. But by offloading short-term debt the pressure is reduced on long-term bonds — selling of those bonds by other investors has been the most intense and raised interest rates for government borrowing.Long-dated gilt sales will be rescheduled for next quarter, the central bank said. It owns £621 billion in gilts, down from £875 billion at its peak in early 2022. More

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    Inside Trump’s Reversal on Tariffs: From ‘Be Cool!’ to ‘Getting Yippy’

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    Economic turmoil, particularly a rapid rise in government bond yields, caused President Trump to reverse course on the steep levies.For the past week, President Trump has been urging calm in the face of the financial chaos that he created and resisting calls for him to rethink his approach.“I know what the hell I’m doing,” he told Republicans on Tuesday as the massive tariffs he had imposed sent global markets into a tailspin. “BE COOL!” he said in a social media post on Wednesday morning. “Everything is going to work out well.”At 9:37 a.m. Wednesday, the president was still bullish on his policy, posting on Truth Social: “THIS IS A GREAT TIME TO BUY!!!”But in the end, it was the markets that got him to reverse course.The economic turmoil, particularly a rapid rise in government bond yields, caused Mr. Trump to blink on Wednesday afternoon and pause his “reciprocal” tariffs for most countries for the next 90 days, according to four people with direct knowledge of the president’s decision.Asked to explain the decision, Mr. Trump told reporters: “Well, I thought that people were jumping a little bit out of line. They were getting yippy, you know, they were getting a little bit yippy, a little bit afraid.”Behind the scenes, senior members of Mr. Trump’s team had feared a financial panic that could spiral out of control and potentially devastate the economy. Treasury Secretary Scott Bessent and others on the president’s team, including Vice President JD Vance, had been pushing for a more structured approach to the trade conflict that would focus on isolating China as the worst actor while still sending a broader message that Mr. Trump was serious about cracking down on trade imbalances.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Bond Sell Off Raises Questions About U.S. Safe Haven Status

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    A sharp sell-off in U.S. government bond markets and the dollar has set off fears about the growing fallout from President Trump’s tariffs, raising questions about what is typically seen as the safest corner for investors during times of turmoil.Yields on 10-year Treasuries — the benchmark for a wide variety of debt — whipsawed on Wednesday after Mr. Trump paused the bulk of the levies he had threatened the week before and raised the rates charged on Chinese goods after that country retaliated. The reversal sent U.S. stocks soaring.After the announcement, the 10-year bond traded at 4.35 percent, slightly lower than earlier in the day but still well above recent levels. Just a few days ago, it had traded below 4 percent. Yields on the 30-year bond reversed an earlier rise that had lifted it above 5 percent. It now stands at 4.74 percent. Selling intensified for short-term government bonds, with the two-year yield surging nearly 0.2 percentage points to 3.9 percent.Amid the tumult, other markets considered alternative safe havens to the United States have gained. Yields on German government bonds, which serve as the benchmark for the eurozone, fell on Wednesday, indicating strong demand. Gold prices rose, too.The U.S.-centric volatility comes on the heels of investors fleeing riskier assets globally in what some fear had parallels to an episode known as the “dash for cash” during the pandemic, when the Treasury market broke down. The recent moves have upended a longstanding relationship in which the U.S. government bond market serves as a safe harbor during times of stress.Adding to Wednesday’s angst was the fact that the U.S. dollar, which is the world’s dominant currency and was largely expected to strengthen as Mr. Trump’s tariffs came into effect, had instead weakened. It shaved some of those losses after the administration’s announcement.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    How Fed Rates Influence Mortgages, Credit Cards, Savings and More

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    The Federal Reserve is expected to keep its key rate steady on Wednesday, after a series of cuts that lowered rates by a full percentage point last year.That means consumers looking to borrow are likely to have to wait a bit longer for better deals on many loans, but savers will benefit from steadier yields on savings accounts.Economists don’t expect another rate cut for a while, as the central bank waits for more clarity on an increasingly uncertain outlook given President Trump’s policies on tariffs, immigration, widespread federal job cuts, among other things.The Fed’s benchmark rate is set at a range of 4.25 to 4.5 percent. In an effort to tamp down sky-high inflation, the central bank began lifting rates rapidly — from near zero to above 5 percent — between March 2022 and July 2023. Prices have cooled considerably since then, and the Fed pivoted to rate cuts, lowering rates in September, November and December.More recently,Mr. Trump’s inflation-stoking polices could prompt the Fed to delay more rate cuts. But at the same time, longer-term interest rates set by the markets have been drifting down, influencing a wide range of consumer and business borrowing costs.Here’s what to watch for in five areas of your financial life:Auto RatesCredit CardsMortgagesSavings Accounts and C.D.sStudent LoansWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Federal Debt Is Now Worrying Even Progressives

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    Long a focus of conservatives, the level of public borrowing is starting to concern left-leaning economists. Proposed remedies still differ radically.The 119th Congress began, as it so often has in recent years, with calls from Republican politicians for wrestling down the national debt, which is near a record level relative to the size of the economy.But this time, the G.O.P. had company: Progressive economists and budget wonks, who have often dismissed finger-wagging about debt levels as a pretext for slashing spending on programs for the poor, are starting to ring alarm bells as well.What’s changed? In large part, long-term interest rates look unlikely to recede as quickly as had been hoped, forcing the federal government to make larger interest payments. And the Trump administration has promised to extend and expand its 2017 tax cuts, which will cost trillions if not matched by spending reductions.“I find it easier to stay calm about this threat when I think the interest rate is low and steady, and I think in the past year or so that steadiness has been dented,” said Jared Bernstein, who led the Council of Economic Advisers in the Biden administration. “If one party refuses to raise revenues, and the Democrats go along more than is fiscally healthy, that’s also a big part of the problem.”To be clear, conservative warnings on the debt have generally been met with little action over the past two decades. A paper by two political scientists and an economist recently concluded that after at least trying to constrain borrowing in the 1980s and 1990s, Republicans have “given up the pretense” of meaningful deficit reduction. Democrats and Republicans alike tend to express more concerns about fiscal responsibility when their party is out of power.Historically, the stock of debt as a share of the economy has risen sharply during wars and recessions. It peaked during World War II. In the 21st century, Congress has not managed to bring the debt back down during times of peace and economic growth.Revenues Are Not Keeping Up With Projected SpendingIf not addressed, debt will probably mount to unprecedented levels.

    Source: Congressional Budget OfficeBy The New York TimesSpending Has Been Creeping UpAs a share of economic output, mandatory outlays — mostly Medicare, Medicaid, and Social Security — are growing fastest. But as debt rises, so do interest costs.

    Source: Office of Management and BudgetBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    The Economy Is Finally Stable. Is That About to Change?

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    President-elect Donald J. Trump’s proposals on tariffs, immigration, taxes and deregulation may have far-reaching and contradictory effects, adding uncertainty to forecasts.After five years of uncertainty and turmoil, the U.S. economy is ending 2024 in arguably its most stable condition since the start of the coronavirus pandemic.Inflation has cooled. Unemployment is low. The Federal Reserve is cutting interest rates. The recession that many forecasters once warned was inevitable hasn’t materialized.Yet the economic outlook for 2025 is as murky as ever, for one major reason: President-elect Donald J. Trump.On the campaign trail and in the weeks since his election, Mr. Trump has proposed sweeping policy changes that could have profound — and complicated — implications for the economy.He has proposed imposing steep new tariffs and deporting potentially millions of undocumented immigrants, which could lead to higher prices, slower growth or both, according to most economic models. At the same time, he has promised policies like tax cuts for individuals and businesses that could lead to faster economic growth but also bigger deficits. And he has pledged to slash regulations, which could lift corporate profits and, possibly, overall productivity. But critics warn that such changes could increase worker injuries, cause environmental damage and make the financial system more prone to crises over the long run.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More