This phrase is occasionally used to characterize investors who sell government bonds in an effort to protest what they see as reckless monetary or fiscal policies, hence raising implied borrowing costs or yields.
In the last week, the disastrous stock market response to Donald Trump’s imposition of tariffs on the rest of the globe has dominated market attention.
Previously, it was believed that Mr. Trump had taken this seriously.
The strength of US stocks, particularly the S&P 500, was viewed by the president throughout his first term in office as a gauge of the administration’s level of success.
Over the last week, he dismissed the negative response from the equities market to his tariffs, arguing that they were like “medicine” that needed to be taken to address what he saw as detrimental global trade imbalances.
However, as usual, Mr. Trump has been forced to blink by the bond markets, and he has done just that.
First, bond prices increased when stocks dropped off after his tariffs were imposed, which were supported by some cheesy arithmetic and a fictitious equation full of Greek symbols.
That wasn’t out of the ordinary; bond rallies typically follow significant sell-offs in stocks, such those that occurred in 1987 and 2008.
