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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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    Trump’s Encouragement of Stock Investors Draws Scrutiny

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    Was the president manipulating the market with his comments, as his critics say, or reassuring Americans, as the White House maintains?President Trump began his Wednesday with some advice for those rattled by his steep tariffs.“BE COOL,” Mr. Trump told his followers on social media after the markets opened. Just a couple of minutes later he wrote, “THIS IS A GREAT TIME TO BUY!!! DJT”Hours after that, Mr. Trump sent the markets soaring when he paused the levies for 90 days. The S&P 500 climbed several percentage points in a matter of minutes and was on its way to its best day since the recovery of the 2008 financial crisis.Soon after Mr. Trump’s pause, Democrats and government ethics experts asked the perhaps obvious question: Did Mr. Trump give the green light to his followers to cash in on a forthcoming rise in stock prices?“How is this not market manipulation?” Representative Mike Levin, Democrat of California, said on social media, referring to action that is potentially illegal. “If you’re a Trump supporter and you did what he said and you bought, then you did great. On the other hand, if you’re a retiree or a senior or somebody in the middle class over the last few days that didn’t have the tolerance for risk and you decided to sell, you got screwed.”The news of Mr. Trump’s pause came as Jamieson Greer, the U.S. trade representative, was testifying on Capitol Hill. Representative Steven Horsford, Democrat of Nevada, pressed him on Mr. Trump’s aim.“It’s not market manipulation,” Mr. Greer said. “We’re trying to reset the global trading system.”“How have you achieved any of that?” Mr. Horsford asked. “So if it’s not market manipulation, what is it? Who’s benefiting? What billionaire just got richer?”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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    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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    Delta Warns Trump’s Trade War Will Weigh on the Economy

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    Delta Air Lines on Wednesday became one of the largest American companies to warn that President Trump’s escalating trade war was weighing on its business and the global economy.Speaking before Mr. Trump reversed many of the tariffs he had just imposed on most countries, Delta’s chief executive, Ed Bastian, said a recession was possible as companies pulled back spending. “Everyone’s being prepared for uncertainty,” he told CNBC, “if that continues, and we don’t get resolution soon, we will probably end up in a recession.”Mr. Trump’s announcement helped send Delta stock up over 20 percent on Wednesday and prompted a broad rally in stocks. The president said he would pause the high tariffs for 90 days but kept a 10 percent tariff on most countries in place.Still, the president’s reversal might not be enough to dispel the uncertainty that has made it hard for companies to plan ahead. The Trump administration also said on Wednesday that it would significantly raise tariffs on China. The United States might not strike trade deals with other countries within 90 days.Airlines are highly sensitive to changes in the economy because air travel is among the first things that individuals and businesses can cut back on when they are worried about their paychecks or profits.Mr. Bastian expressed shock at the speed at which the trade tensions had taken the wind out of the economy.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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    U.S. Bond Sell-Off is Another Worrisome Echo of the Liz Truss Fiasco

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    The parallels between President Trump and Liz Truss, Britain’s shortest-serving prime minister, are growing starker. Ms. Truss triggered market turmoil in 2022 after she proposed sweeping tax cuts that she proposed to pay for with massive government borrowing. Ms. Truss was ultimately doomed by fears of a credit crisis after yields on British government bonds spiked.Now, yields on U.S. Treasuries are beginning to rise. On Wednesday, in the hours after Mr. Trump’s latest tariffs went into effect, including levies of more than 100 percent on China, the yield on the 10-year U.S. Treasury rose to as high as 4.5 percent, up from around 3.9 percent a few days ago. The yield on a 30-year bond briefly traded above 5 percent.Yields are still generally lower than when Mr. Trump was inaugurated, but a sustained sell-off of Treasuries would erase the key difference between the global market response to Mr. Trump’s tariffs and Ms. Truss’s tax cuts. In the immediate aftermath of the president’s tariff announcement, bond yields actually drifted down, even as the stock market plummeted and dollar weakened. This partly reflected expectations for slowing growth, but also served as a reminder of the traditional status of the American bond market as a haven for investors.Now, that safe-haven status may be crumbling, according to some analysts. At the extreme, that could raise pressure on the Federal Reserve to intervene, which is what the Bank of England did in 2022 to shore up the British bond market.In Britain’s case, those dramatic events forced Ms. Truss to rescind her proposed tax cuts, and the market chaos subsided. But Ms. Truss’s credibility was destroyed, and she was forced to step down after 44 days in office. Mr. Trump, by contrast, has shown no sign that he plans to reverse the tariffs, and for now, there appear to be few political levers to force his hand. More

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    Stock Market Chaos Over Tariffs Could Take Toll on Economy

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    A big hit to portfolios would be felt acutely by higher-income Americans, whose spending has recently been the biggest driver of the economy.This time, maybe the stock market is the economy.Financial markets around the world have plummeted in the days since President Trump announced sweeping tariffs, setting off a global trade war. The S&P 500 declined more than 10 percent in two days last week, and it swung wildly on Monday amid news of further tariffs and rumors of delays. Stock indexes in Asia and Europe have fallen sharply as well.Experts often caution that the stock market can be a misleading measure of the broader economy. Share prices can move for a host of reasons — technological developments, shifts in consumer preferences, changes in tax or interest rate policy.Sometimes, though, the markets carry an economic message — and in recent days, they have been speaking unusually clearly. Investors overwhelmingly believe that Mr. Trump’s tariffs, and retaliation from U.S. trading partners, will lead to higher prices, slower growth and possibly a global recession.Plunging stock prices may not just reflect fears of a recession. They may also help cause one, as consumers pull back spending in response to their portfolios’ evaporating value.A few days of turmoil might not matter much, said Ryan Sweet, chief U.S. economist at Oxford Economics, a forecasting firm, “but if the drop in the stock market persists for a few weeks, a couple months, the economic costs begin to quickly mount.”The direct effects of tariffs will fall hardest on low- and moderate-income consumers, who tend to spend more of their money on food, clothing and other goods subject to duties, and who have less savings to insulate them from higher prices. But market declines will be felt most acutely by higher earners, who own a disproportionate share of stocks and other investments.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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    What Is a Bear Market? Are We in One?

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    President Trump’s global tariffs have sent stock markets worldwide into a tailspin, and the S&P 500 on Monday briefly entered bear market territory for the first time since 2022.Mr. Trump has seemed unmoved by the decline. He signaled on Monday that he had no plans to back off on tariffs, insisting that they would bring in “billions of dollars” in revenue and that other countries had been “abusing” the United States with their trade policies.Here is what to know about a bear market.What is a bear market?A bear market is a Wall Street term for a sustained market downturn, when a stock index closes 20 percent from its last peak.The 20 percent threshold signals investor pessimism about the future of the economy.Are we in a bear market now?The S&P 500, the benchmark U.S. stock index, opened lower on Monday. The index was already down 17.4 percent from its last high, on Feb. 19, and if it closes Monday’s trading with a loss of at least 3.1 percent, that would tip it into a bear market. More

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    After Trump Tariffs, Volkswagen to Add ‘Import Fees’ to Cars Sold in U.S.

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    Volkswagen, the German automaker, has told its car dealers that it plans to add an import fee later this month to the price of imported cars sold in the United States.The company’s move is one of the first and clearest examples of automakers using price increases to deal with the 25 percent tariffs President Trump imposed on car and auto parts imports. The tariffs on vehicles went into effect on Thursday and the levies on parts will become effective on May 3.In an April 1 memo to dealers, Volkswagen said that the exact fees would be determined by the middle of April. The New York Times reviewed a copy of the memo. The automaker also told dealers it planned to cut back on sales incentives and had halted rail shipments of cars to the United States from its plants in Mexico, although shipments by sea continue.Volkswagen plans to hold cars that are subject to the tariffs in port for “the near term.” It also told dealers that the price of the Volkswagen Atlas sport utility vehicle, which is made in Chattanooga, Tenn., could be affected by the tariffs because it includes important imported components. The extent of the impact most likely will not be known until May, the memo said.The automaker, including its Audi and Porsche brands, imports almost all the cars it sells in the United States. Besides the Atlas, Volkswagen also assembles the ID.4 electric sport-utility vehicle in Tennessee.In a statement, Volkswagen confirmed it had sent the memo to dealers because it wanted to be “very transparent about navigating through this time of uncertainty.”“We have our dealers’ and customers’ best interest at heart, and once we have quantified the impact on the business we will share our strategy with our dealers,” the company said.Other automakers are also making adjustments to respond to the tariffs. Stellantis, which owns Jeep, Ram, Dodge and Chrysler, said on Thursday that it is temporarily halting production at a plant in Mexico and another in Canada in response to the auto tariffs.The company said that a factory in Windsor, Ontario, that makes the Chrysler Pacifica minivan and the Dodge Charger muscle car will shut down for two weeks. And a plant in Toluca, Mexico, that makes the Jeep Compass and Wagoneer S will be idled starting on April 7 for the rest of the month.Stellantis said that the production stoppages in Canada and Mexico would force it to lay off about 900 workers in Indiana and Michigan. More