Debt Loads and Erratic Politics Haunt Bond Markets
- Angst is rising about market’s ability to buy so much debt
- Beneath the rate-cut euphoria, there are early warning signs
Treasury yields jumped after Donald Trump trounced Joe Biden in the presidential debate.
Photographer: Jayme Kaye Gershen/BloombergThe bond-market tremors came two weeks and two continents apart.
The first was in mid-June, when French President Emmanuel Macron’s decision to call a surprise election triggered a selloff amid fears a new government would ramp up spending. Then Treasury yields jumped after Donald Trump trounced Joe Biden in the presidential debate, fanning concern the US deficit will surge if the tax-cutting Republican returns to the White House — a trade that flared again early last week after the assassination attempt rallied supporters around his candidacy. Another twist came Sunday, when Biden announced he’s no longer seeking the Democratic Party’s nomination and endorsed Vice President Kamala Harris.