[voisin]

The strategy is to sow fear and uncertainty to drive capital from stocks to government bonds and drive down the bond yield. Bessant is pretty clear about this. Once they get the bond yields down and refinance a lot of the short term debt into longer term debt they free up operating budget. Combine with Elon’s DOGE cutting costs and Lutnick raising some capital from tariffs, and it is a pretty good strategy. I don’t agree with Trump’s policies generally nor am I American, but this is a good short term strategy.

[alabastervlog]

It's not a good short term strategy at all. If that's really the goal, their left and right hands need to have a chat because one of them's going to make the deficit way worse, so if the other's goal is to "free up operating budget" by reducing debt service they really ought to get on the same page, because anything "freed up" is going to be eaten by the other bullshit they're doing.

Besides, this is a wildly expensive way to go about it. The harm to receipts from the economic uncertainty will blow a hole in the federal budget and leave states reeling (to say nothing of the "other hand" making cuts at the IRS, which will also be a net cost)

[ojbyrne]

Great strategy, except its not working. Bond yields are up (probably because foreigners and foreign countries are selling US bonds). DOGE cost cuts are insignificant. Raising capital from tariffs doesn't seem to be working because they're really taxes, and Americans don't like taxes.

[stafferxrr]

This is exactly the strategy but it is failing miserably.

The reason for the pivot was because the 10-30 year yields didn't come down, the price on the 30 year got crushed. The 30 year almost went back to the lows.

There was literally no flight to safety. Completely the opposite.

[voisin]

It seems like there was a flight to safety but then China started dumping bonds. I think we are witnessing the ‘war’ in trade war!

[deng]

> I don’t agree with Trump’s policies generally nor am I American, but this is a good short term strategy.

This strategy has failed spectacularly, as bond yields are still up and treasuries are sold like crazy. US treasuries are no longer seen as safe havens. People rather invest in gold or treasuries from other countries which are not led by a corrupt government. Buying US treasuries is now seen as "lending Trump money", and since Trump runs the US economy exactly like he ran his companies, where IIRC he defaulted on debt at least six times, US treasuries are now a rather risky investment.